Marissa Mayer resigns as Verizon takes over Yahoo in $6 billion deal

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Sunnyvale, California: Yahoo chief executive Marissa Mayer has announced her resignation in a message to employees, confirming the firm’s $US4.5 billion ($6 billion) sale to Verizon has closed.

“It’s an emotional time for all of us,” Mayer, 42, wrote in a blog post on Tuesday. “Given the inherent changes to my role, I’ll be leaving the company.”

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A Yahoo independent committee finds certain senior executives didn’t properly “comprehend or investigate” a 2014 security breach.

Tuesday’s closure of the sale ends Yahoo’s 21-year history as a publicly traded company.

Yahoo’s email and other digital services such as sports, finance and news will be run by former Yahoo chief executive and former Google executive  Tim Armstrong.

Armstrong has been running AOL since Verizon bought that company for $US4.4 billion two years ago.

He will now be chief executive of a new Verizon subsidiary called Oath, which will consist of Yahoo and various AOL services.

About 2000 Yahoo and AOL workers are expected to lose their jobs as Verizon trims expenses and eliminates overlapping positions.

Despite the company’s struggles, Yahoo’s stock more than tripled while Mayer was chief executive, creating more than $US30 billion in shareholder wealth.

What remains of the former Yahoo will become an investment company called Altaba, headquartered in New York City, with holdings of about $US52 billion in Chinese e-commerce giant Alibaba and about $US9 billion in Yahoo Japan, plus a collection of patents.

Mayer’s nearly five years leading the iconic Sunnyvale internet firm were notable for her failure to reverse its declining fortunes and for two world-record hacks of user data.

Verizon has taken over Yahoo, completing a $US4.5 billion deal that will usher in a new management team to attempt to ... Verizon has taken over Yahoo, completing a $US4.5 billion deal that will usher in a new management team to attempt to wring more advertising revenue from one of the internet’s best-known brands.  Photo: AP

But in her message to workers, Mayer pointed to achievements by the company that were largely overshadowed by the troubles.

Yahoo has drawn in more than a billion monthly users, making it one of three internet firms in the world to boast that number of viewers, while increasing monthly mobile users to more than 650 million, Mayer said

Outgoing Yahoo CEO Marissa Mayer. Outgoing Yahoo CEO Marissa Mayer. Photo: AP

She pointed to the business areas she has dubbed “mavens”, meaning mobile, video, native advertising and social, saying they generated more than $US2 billion in revenue last year, 42 per cent of the company’s total income, up tenfold from 2012.

Mayer also cited other accomplishments under her watch, saying that, since July 2012, “we oversaw the creation of $US43 billion in market capitalisation and shareholder value”.

The closure of the sale ends Yahoo's 21-year history as a publicly traded company. The closure of the sale ends Yahoo’s 21-year history as a publicly traded company. Photo: Jose Sanchez

Analyst Scott Kessler of CFRA Research counted 79 uses of the word “we” in Mayer’s message.

“Clearly she wanted to make clear that she and the team did and achieved quite a bit over the last nearly five years, and [she] articulated many points to various constituencies to support that notion, writing directly to users, advertisers, shareholders and employees,” Kessler said.

She was also aiming at another constituency: future employers and funders, Kessler said.

“That letter largely constitutes a resume for her to put in front of … companies and venture capital firms,” Kessler said.

Still, Mayer has a right – to a point – to highlight accomplishments by Yahoo under her leadership, Kessler said.

Yahoo’s stock price had fallen below $US20 when Mayer came in and now it’s over $US50, Kessler noted.

“There’s probably more to be proud of than many had understood or acknowledged, but I think it’s fair to say that the letter does not paint a completely comprehensive or objective picture of Yahoo over the last five years,” he said.

Absent from Mayer’s missive are any direct references to the massive data breaches, loss of market share to Google and Facebook, periods of poor stock performance, and revenue that has fallen precipitously since the end of 2009, Kessler pointed out.

And Mayer took substantial heat over expensive acquisitions that gained some talent for the firm but essentially went nowhere, such as Yahoo’s $US1.1 billion purchase of blogging site Tumblr in 2013 – the venue she chose for publishing her message on Tuesday.

“Ironically, everyone was looking at her Tumblr post, but how many times do people find themselves on Tumblr these days?” Kessler said.

Mayer’s tenure as Yahoo’s CEO has been subjected to constant scrutiny and frequent attacks by analysts, investors and the media – and much of the judgment arose because of her gender, argued Women in Technology International president David Leighton.

Leighton compared the $US4.4 billion sale to Verizon of a struggling AOL under Armstrong with the $US4.5 billion sale to Verizon of a troubled Yahoo under chief executive and former Google executive Mayer.

“Tim sold the company to Verizon and he was a hero,” Leighton said. “Marissa sold the company to Verizon and basically did the exact same thing, and she’s a failure.”

The flak Mayer caught for ordering employees to quit working remotely stands as an example of the handicap she faced as a woman in an industry dominated by men, Leighton said.

Men in this position are typically seen as great leaders, he said, but a female leader who acts aggressively is derided.

“She’s just an off-the-charts genius, and I’m sure she’ll do very well,” he said.

Mayer is to receive a $US23 million golden parachute, according to a Yahoo regulatory filing.

The Mercury News, AP