It was both and more. I started there back when Bartz was CEO. Bartz continued down the media company path that was already established. Thompson doubled down and cut huge amount of tech talent to focus on media. Like he literally almost completely killed labs the PhD wing that did research. There are other things that elaborate on that really hurt and created the outcome we see today.
When MM started she had no idea of the technical debt she was going to inherit. Something to keep in mind is that Yahoo invented web at scale. It started on FreeBSD and had kernel contributors even when I started. I think they all work for Apple these days. To help handle scale Yahoo would create Yahoo versions of software via things like kernel extensions or software patches. Nobody was doing these things back in the late 90s, but it was needed. Back then nobody knew what we know now and they literally where making it up as they went along.
The thing is when you are the first to the table it sometimes creates technical issues. Sometime before I started there was a decision to shift from BSD to Linux. That was probably a good decision, not because of the merits of FreeBSD, but because Linux was getting a lot more headway with extra contributors. When you have code that was dependent on kernel extensions and you change kernels you get some pain points. Some are manageable others are not. I don't think anybody knew how painful that transition would be, well maybe Filo did because he was crazy aware of everything. As a side note when I started Filo was maybe a L3 but I think a L4 because tech was just that that devalued. So if he did know he probably didn't have much say in the matter. Even as a major stock holder he is not the kind of guy that throws that around, I really think he cares more about the tech then his bank account. If I had his bank account I probably would be in the same place.
Yahoo also made a somewhat fatal accounting issue prior to me getting there and probably early on. This was probably the right thing at that time, but it morphed into a bigger issue later down the road. They wanted to isolate "properties" or business units financially. To do that each property, such as news, sports or mail had their own hardware and justification for the hardware. This unfortunately creates a hoarding of assets since you never know when you can get more compute or storage. Keep in mind we are are talking pre-VM tech for you young folks and buying a server cost some big bucks. This created a culture or inertia that made to switch to VM very difficult. That wasn't the only thing. If the sports "product" is separate from the news "product" and assets, both physical and talent wise are isolated, then where is the incentive to share? This doesn't mean there was no sharing, there was, but it created a culture of do it your own way to get things done.
When MM started she focused internally at first. If you where in the building you got that. If you where in IT then well you knew there was a laser on you. It was all about getting the simple things first, upgrade outdated laptops etc. Then it moved to getting infrastructure in place. She was trying to shift the culture from mediocrity for developers to a developer and product first standpoint. It then became about reducing technical debt and lifting the barriers between groups. That ship does not correct overnight. There was some point in this that she did have to embrace the media focus and did a few big deals to get media talent, just is just a guess, but the timing is right.
Probably the final nail in the coffin was delivered unknowingly by co-founder Jerry Yang. With all best intentions Yang helped his friend Jack Ma with the Alibaba venture. Instead of a personal investment Yang opted for a joint venture where Alibaba got Yahoo China and some cash and Yahoo got some shares in Alibaba. Well as we all know Alibaba took off and the deal is just epic in terms of ROI. That created a big issue though. When MM took the reigns she would grow the stock price marginally which should have bought time, but Alibaba took over. The stock price became a proxy to Alibaba and the hedge funds took notice. Enter Jeffery Smith and his hedge fund. He did his job, as unpleasant as some of us might think, and went to work on maximizing return. Most of that return is in tax savings so he started working that angle which is ultimately why this sale is going to happen. When a company goes from $15 per share to $40 per share because of a holding, you are and investment company. There is nothing that can be done you are tied to the holding.
When Yahoo hired MM they had fired 2 CEOs in the past year, had two interim CEOs, and was probably looking to just get somebody that had a chance of righting the ship.
This is true, and what Yahoo did in its early days was definitely impressive, but the talent that did it moved on, and was never replaced.
When I joined in 2013, I encountered a lot of systems/processes/whatever that would have been impressive in 2003, but hadn't been updated or replaced in 10 years, and the culture inside Yahoo was still stuck in a weird not-invented-here bubble where a lot of people thought their 2003 tech was still impressive.
Turns out, if you gut the engineering organization over a decade, you end up with a B team, and you're completely unable to attract the A players necessary to keep innovating.
There's a lot of criticism in this thread that Marissa didn't do anything worthwhile, but she sure as hell tried. All those acquisitions? Almost all of them were acquihires, in a desperate attempt to get A players. Most of those didn't stick around very long though, because there's only so much shit and technical debt you can stand, and then the company is out the money, and has very little to show for it. It could have worked, but it didn't.
I believe we fought many of the same battles then. I think every Yahoo engineer at that time can curse ylock. If you where good though you looked at it with the WTH ylock did and thought hell it wasn't that bad for 20th century or early 21st, unfortunately there we where in early twenty tens constained and just trying to get a 64-bit kernel.
It's worth note that Facebook also had some similar challenges. They had so much in PHP and if you are an idiot and think just rewrite well then you would be doomed to failure. The advantage that Facebook had a few years back was that the didn't go through a period of removing tech talent in the same fashion that Yahoo did. They also had cash, a lot of cash. They could afford to pay for things like HipHop. By the time Yahoo needed a tech refresh they had already burned the cash and caused the talent to leave.
I know that sounds bleak, but at the same time while I was there after MM I did find really great talent. Some of that existed before she was there. I can think of several folks on tech47 project and they know who they are. They don't really need to be told they are talent. At the same time I can think of many new guys that brought it on. I still think one of the better talks I had was a with the new guy that wrote some of the Android network stack. Without telling names, he was describing the issues between dropping WiFi and dropping cell. One is easier then the other, if I drop WiFi and still have cell I can continue. If I drop cell I can only hope for WiFi. Either case is hard because the stack needs to understand an IP address shift and adjust accordingly. When you have that talent that understands and can code it, then you get things done. Unfortunately with everything else in the valley getting a quick hit and retaining are two different things.
Facebook also has one single product, whereas Yahoo has I don't know how many products, and they're all completely different, on sort of different stacks, in different silos and budget orgs, and all slightly different such that unifying them is an enormous task.
If they had had the engineering talent and budgets to build the kind of shared infrastructure and fundamentals that for example Google did, they would have been in a very different spot.
The alibaba investment was probably Jerry Yang's best ROI decision aside from being a part of starting the company in the first place...
Unfortunately for Yahoo itself that decision was SOOO good that it would eventually consume the company.
Because there was basically no way for the company to overcome how valuable it was as an Alibaba proxy and wall street started to look at all of its other endeavors as just high risk low chance of return gambling with the Alibaba money.
When MM started she had no idea of the technical debt she was going to inherit. Something to keep in mind is that Yahoo invented web at scale. It started on FreeBSD and had kernel contributors even when I started. I think they all work for Apple these days. To help handle scale Yahoo would create Yahoo versions of software via things like kernel extensions or software patches. Nobody was doing these things back in the late 90s, but it was needed. Back then nobody knew what we know now and they literally where making it up as they went along.
The thing is when you are the first to the table it sometimes creates technical issues. Sometime before I started there was a decision to shift from BSD to Linux. That was probably a good decision, not because of the merits of FreeBSD, but because Linux was getting a lot more headway with extra contributors. When you have code that was dependent on kernel extensions and you change kernels you get some pain points. Some are manageable others are not. I don't think anybody knew how painful that transition would be, well maybe Filo did because he was crazy aware of everything. As a side note when I started Filo was maybe a L3 but I think a L4 because tech was just that that devalued. So if he did know he probably didn't have much say in the matter. Even as a major stock holder he is not the kind of guy that throws that around, I really think he cares more about the tech then his bank account. If I had his bank account I probably would be in the same place.
Yahoo also made a somewhat fatal accounting issue prior to me getting there and probably early on. This was probably the right thing at that time, but it morphed into a bigger issue later down the road. They wanted to isolate "properties" or business units financially. To do that each property, such as news, sports or mail had their own hardware and justification for the hardware. This unfortunately creates a hoarding of assets since you never know when you can get more compute or storage. Keep in mind we are are talking pre-VM tech for you young folks and buying a server cost some big bucks. This created a culture or inertia that made to switch to VM very difficult. That wasn't the only thing. If the sports "product" is separate from the news "product" and assets, both physical and talent wise are isolated, then where is the incentive to share? This doesn't mean there was no sharing, there was, but it created a culture of do it your own way to get things done.
When MM started she focused internally at first. If you where in the building you got that. If you where in IT then well you knew there was a laser on you. It was all about getting the simple things first, upgrade outdated laptops etc. Then it moved to getting infrastructure in place. She was trying to shift the culture from mediocrity for developers to a developer and product first standpoint. It then became about reducing technical debt and lifting the barriers between groups. That ship does not correct overnight. There was some point in this that she did have to embrace the media focus and did a few big deals to get media talent, just is just a guess, but the timing is right.
Probably the final nail in the coffin was delivered unknowingly by co-founder Jerry Yang. With all best intentions Yang helped his friend Jack Ma with the Alibaba venture. Instead of a personal investment Yang opted for a joint venture where Alibaba got Yahoo China and some cash and Yahoo got some shares in Alibaba. Well as we all know Alibaba took off and the deal is just epic in terms of ROI. That created a big issue though. When MM took the reigns she would grow the stock price marginally which should have bought time, but Alibaba took over. The stock price became a proxy to Alibaba and the hedge funds took notice. Enter Jeffery Smith and his hedge fund. He did his job, as unpleasant as some of us might think, and went to work on maximizing return. Most of that return is in tax savings so he started working that angle which is ultimately why this sale is going to happen. When a company goes from $15 per share to $40 per share because of a holding, you are and investment company. There is nothing that can be done you are tied to the holding.
When Yahoo hired MM they had fired 2 CEOs in the past year, had two interim CEOs, and was probably looking to just get somebody that had a chance of righting the ship.