3 Reasons Why New Yahoo CEO Marissa Mayer Could Get It Right

Marissa Mayer
Marissa Mayer

Yahoo (YHOO) has thrown the market a curve ball: Just when investors figured that interim CEO Ross Levinsohn was about to strike the "interim" out of his title, an outsider was named to lead the company on Monday.

Longtime Google (GOOG) executive Marissa Mayer will be the next CEO at the dot-com pioneer. Make that "struggling dot-com pioneer" -- you know that's the case because Mayer will be the company's fifth CEO in as many years.

Turning Yahoo around would be a pretty daunting task, but there are some good reasons to believe Mayer has a shot.

1. Google Is Chief Executive Factory

A Big G pedigree is pretty good. AOL (AOL) CEO Tim Armstrong headed up sales at Google before joining the online juggernaut in 2009. Facebook (FB) COO Sheryl Sandberg cut her teeth at Google before catching the eye of Mark Zuckerberg, who tapped her to turn his hot social networking website into a viable business. Why can't Mayer be the next ex-Google exec success story?

2. Mayer Is Too Smart to Make Dumb Deals

Jerry Yang blew it when he turned down Microsoft's (MSFT) generous buyout offer three years ago. Carol Bartz blew it by signing a deal with Microsoft a year later that stripped it of its search engine roots and outsourced its search business through Bing.

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I don't know whether Mayer would've taken Microsoft's offer that would have cashed out Yahoo investors at more than double the price that the stock is fetching today, but she probably wouldn't have cut the deal that made Yahoo! less relevant in exchange for an ongoing piece of the action.

Coming from Google, Mayer knows the importance of search and how it drives revenue throughout a successful Internet company.

3. Sooner or Later, a Yahoo CEO Is Going to Get It Right

Yahoo has gone to extremes in the past in finding someone to lead the company into the future. It went too Hollywood with Terry Semel. It went too nostalgic when it let co-founder Yang give it a shot. Bartz was a bad experiment in giving old-school tech leadership a crack. We'll never know if PayPal's Scott Thompson could've done the trick. His credibility fell apart after a fib on his corporate bio.

Yahoo! is rich in cash and Asian assets. It's even richer in magnetism. The company still generates a ton of page views, and its balance sheet and investment give any CEO the luxury of taking chances until it becomes a growth story again.

Someone's going to get Yahoo!'s stagnant top line growing again. Why can't that someone be Mayer?

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Longtime Motley Fool contributor Rick Munarriz does not own shares in any of the stocks in this article. The Motley Fool owns shares of Google, Facebook, and Microsoft. Motley Fool newsletter services have recommended buying shares of Microsoft and Google and creating a bull call spread position in Microsoft.

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