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What does Yahoo’s downsizing mean for the tech giant’s future?

February 3, 2016 at 6:30 PM EDT
Tech giant Yahoo has long struggled to define a strategy to satisfy investors, consumers and the markets. On Tuesday, CEO Marissa Mayer announced that the company would consider offers for buying its core assets and would be laying off 15 percent of its workforce. Judy Woodruff learns more from Douglas MacMillan of The Wall Street Journal.

JUDY WOODRUFF: But, first: the tech giant Yahoo in serious trouble.

For months, and years, by some accounts, the company has struggled to successfully define a strategy to satisfy investors, consumers and the markets. Yesterday, Yahoo CEO Marissa Mayer said the company would consider offers for buying its core assets and announced that 15 percent of the work force would be laid off.

Douglas MacMillan of The Wall Street Journal joins me now.

Welcome to the program.

So, how much trouble is Yahoo. in?

DOUGLAS MACMILLAN, The Wall Street Journal: It looks like we might be finally entering kind of the final chapter of what is really one of the most iconic companies in Silicon Valley and in the Internet.

Yahoo began as kind of one of the kind of tentpoles of the Internet, the place where millions of people would go on kind of find, you know, news and sports and information on the Web. But, as the world has shifted to kind of an Internet that’s focused around search and around mobile phones and around social networks, Yahoo has really struggled to kind of find an identity and find, you know, a business model in this kind of new era of the Internet.

And, particularly, the CEO the past three-and-a-half years, Marissa Mayer, has struggled to kind of reinvent Yahoo for kind of this new era.

JUDY WOODRUFF: But this is a company that has, what, a billion people a month going to its Web site, using e-mail and other services. How does that square with all these problems?

DOUGLAS MACMILLAN: Yes, they have a billion people collectively visiting their Web properties, but, you know, not many of them are regularly checking in with Yahoo on their mobile phones on a consistent basis.

And that, as we have seen with Google and with Facebook and with other Internet companies that have successfully kind of made the jump to the mobile phone era, is becoming kind of the basis of a successful, you know, business plan in 2016.

JUDY WOODRUFF: You mentioned the CEO, Marissa Mayer. We quoted her, what she said, a minute ago. How much of had is being blamed on her? We know some of the investors are calling for her to be removed, but how much of it is her, and how much of it is just this is a sector that it’s very difficult to survive, as you just described, in this climate?

DOUGLAS MACMILLAN: Yes, particularly I think there’s something to be said for how difficult a task it is to turn around an Internet company, a technology company that is in decline, that is in freefall.

It’s really almost never been done in this industry. So, perhaps, you know, Marissa Mayer inherited or, you know, took on an impossible task. But, on the other hand, when she did join the company three years ago, there was a lot of excitement, there was a lot of enthusiasm that she brought to the company, and people wanted to work at Yahoo for the first time in over a decade.

So I think what we’re seeing right now, as we’re potentially neither the end of kind of her tenure and the end of Yahoo as an independent company, is there’s just a lot of disappointment in what could have been, and, you know, could she have, you know, potentially turned around this company?

It’s unclear, you know, what she could have done differently.

JUDY WOODRUFF: She’s still saying that it’s going to turn around.

DOUGLAS MACMILLAN: So it’s interesting what she says and kind of what the board is saying right now.

The announcement yesterday that Yahoo’s pursuing strategic alternatives seems to indicate that they are seriously considering putting this company up for sale. And, indeed, there are bankers circling this company, and potential acquirers, who would like to buy Yahoo, circling this company.

But, you know, whether it’s just for optics, whether she’s just putting on a show, or wherever, you know, Marissa really believes she can still turn this company around, she has put together a go-forward plan that has reduced some of the expenses. She cut — she has planned to cut 15 percent of the work force. She’s planned to close a few different individual small business units, close a few remote offices.


DOUGLAS MACMILLAN: But what she’s essentially doing amounts to kind of cleaning out the attic, when what we’re really talking about is a sale of the whole house.

JUDY WOODRUFF: Douglas MacMillan of The Wall Street Journal, thanks very much.