Can Marissa Mayer Turn Around Yahoo?

The tapping of Marissa Mayer to become the next chief executive ofYahoohas surprised Silicon Alley and corporate America.

Marissa Mayer named President and CEO of Yahoo.
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Marissa Mayer named President and CEO of Yahoo.

Mayer, who was one of the top executives of Google, will take over as CEO of Yahoo starting tomorrow.

She has deep roots at Google , where she was employee Number 20. For years, she has been one of the few public faces of the company and has led teams responsible for some of Google’s best-known products: search, Gmail, Google News, iGoogle, and Google Maps.

Not many expected her to leave Google anytime soon—much less for a company as troubled as Yahoo.

Once the initial shock of Mayer’s leaving Google for Yahoo wears off, people will start to ask the big question: Can she do it? Can Mayer turn around the once high-flying internet company and restore it to its former glory? (Check out some of the Twitter reaction here)

Although Yahoo remains one of the largest destinations on the internet, it is widely seen as having fallen behind both Google and Facebook . A few years ago, Yahoo gave up its search engine business to partner with Microsoft . Its attempts to grow in the social space—including the purchase of the once influential photosharing site Flickr—are widely viewed as failures and fumbles. (Disclosure: CNBC has a content-sharing partnership with Yahoo’s finance site.)

Financial performance has been dismal. The company’s shares are down more than 40 percent over the last 5 years.

Mayer will be the fourth CEO of Yahoo since Jerry Yang, the company’s co-founder, took over from Terri Semel in 2007. (Not counting two interim CEOs). The last CEO, Scott Thompson, resigned after activist investor Daniel Loeb, of the hedge fund Third Point, raised questions about whether Thompson had lied about his academic credentials.

Some in the tech sector wonder whether there’s a Yahoo curse.

“Not only is Yahoo in a terrible state—it ruins the careers of everyone who runs it,” said one person at Google who asked not to be identified.

Still, Loeb and others believe there is real value to be unlocked in Yahoo if led by the right person. Mayer is most likely the person with the most relevant experience and highest profile Yahoo could have hoped to attract.

“She's got a tough road ahead, however she seems a good fit,” a former Google executive said via email shortly after the news was announced.

One advantage she may have over other potential leaders of the company is that she should be able to attract a deep bench of talent to the company. In recent years, Yahoo has suffered from the perception that it just wasn’t a cutting edge or “cool” place to work anymore. Mayer’s connections and reputation in Silicon Valley may allow her to restore some cachet to working at Yahoo.

In a 2009 interview with Charlie Rose, Mayer said that Yahoo's loss of top people was the source of its difficulties.

"I definitely think that what drive technology companies is the people. In a technology company it's always about what are you going to do next. So it comes down to who's going to build that thing you do next. If you have the best people, that's a huge benefit. I do think that some of what happened with Yahoo is a little bit of that lost focus. But I think that over the events of recent years they've lost a lot of their good people," Mayer said.

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