Yahoo! Inc. (YHOO): Does the Company Need to Improve on the Basics?


yahoo

Yahoo! Inc. (NASDAQ:YHOO) is in the spot light again as investors question the moves of Marissa Mayer. Now a barrage of bad press circulating around a New York Times Magazine article has people questioning everything from Mayer’s unilateral decision making to whether Yahoo is improving enough on the basics.

Mayer on the job

Some have cited that the company could be headed into irrelevance, which might sound as a grossly unkind assessment of Mayer’s work in the company. Since joining Yahoo! Inc. (NASDAQ:YHOO) from Google, Mayer has tried to change a lot of things in the company. She has hired more talent, shown others the door and acquired numerous startups to improve performance. Mayer has at least managed to stabilize a company that has had most of its good news come from its investment in Chinese Internet Giant, Alibaba.

However, even in basic things like webmail services, Yahoo keeps disappointing even its faithful disciples. The frequent downtime of Yahoo mail account is something that doesn’t excite users. Besides almost unreliable webmail service, Yahoo’s foray into mobile is also not impressive. There are a lot of destructive features on its mobile platform, which can only serve to keep users away.

Performance ranking

Industry insiders have also cited that Yahoo! Inc. (NASDAQ:YHOO) made a wrong move by jumping onto a performance review system that almost made Microsoft Corporation (NASDAQ:MSFT) irrelevant. In what appeared to be an effort by Mayer to reward best performers and weed out non-performers, Yahoo introduced a ranking system or quarterly performance reviews.

Under the system, Yahoo! Inc. (NASDAQ:YHOO) employees were ranked in a performance scale of 1 to 5. However, the move proved counterproductive. For example, people were no longer interested in working together. In a nutshell, employees feared making moves that could expose them to lower ranking.

Mayer cannot be blamed for all the challenges that Yahoo! Inc. (NASDAQ:YHOO) currently faces. However, there is no gainsaying that the company needs to do more to improve performance and shareholder value, especially in the face of the highlighted service quality challenges.

 

Neha Gupta

Neha Gupta has been in the financial space for over six years now. Gupta earned her MBA degree from Symbiosis Centre of Distance Learning in 2009 and her passion for finance led her to pursue Chartered Financial Analyst (CFA) course. She has successfully completed Level II of her CFA. She is a veteran in article writing, which is depicted in her numerous pieces published on SeekingAlpha, Nextiphonenews, InsiderMonkey, MarketWatch, and Techinsider. Her crisp and eloquent writing finds its best place in Researchcows, where emphasis is given on developing rich content for various websites, products, business plans, trainings, and book writing.

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