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Bumps on a Road to Revival for Yahoo
Vindu Goel and
SAN FRANCISCO — It looks as if the Google pixie dust isn’t so easy to spread around.
Marissa Mayer’s arrival at Yahoo as chief executive a year and a half ago was widely hailed as an opportunity to infuse the struggling Internet pioneer with the smarts and cachet that had helped her succeed as a top executive at Google. She was one of the earliest employees at Google, with a reputation for inventiveness and attention to detail. If anyone could fix Yahoo, it was believed, it was Ms. Mayer.
But the announcement on Wednesday that she had tossed out her top lieutenant, Henrique de Castro, was her first public acknowledgment that turning around Yahoo would be far more difficult than has sometimes been suggested by the media attention she has received.
“That was Marissa’s first big hire,” said Robert Peck, an analyst at SunTrust Robinson Humphrey. “You can imagine how difficult it would be to admit a mea culpa.”
Bringing on Mr. de Castro, who was also a longtime Google executive, was just one of many prominent moves Ms. Mayer has made, including buying the blog site Tumblr for $1.1 billion, hiring the television host Katie Couric to be the anchor of a new online news operation and starting an online food magazine.
While Ms. Mayer took the public spotlight — for example, she personally introduced Yahoo’s new consumer technology site at a trade show in Las Vegas this month — Mr. de Castro was charged with the less sexy but equally vital task of reviving Yahoo’s advertising business. While that would be a herculean task for anyone at a company whose fortunes have been declining for a decade, Mr. de Castro was particularly ill suited for the job, according to ad-industry executives, analysts and people who worked with him at Google and Yahoo. When Ms. Mayer hired him, the choice mystified people both inside and outside the company. And tension quickly developed between the two leaders, according to the company insiders, most of whom spoke on the condition of anonymity to not upset business relationships.
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