National News

A food critic's power in the Internet age

Marketplace - American Public Media - Tue, 2015-01-06 12:08

Local restaurant reviewer Leslie Brenner has ruffled the feathers of a chef and some restaurateurs in Dallas. She's been attacked on Twitter and Facebook, and some restaurants are not cooperating for reviews.

In an era of online reviews and food bloggers, does it really matter what one critic writes in a newspaper? More than you might think.  The Internet has changed how reviews impact the business of restaurants and how professional critics do their jobs.

A great place to see that transformation is at the crossroads of tech and dining in San Francisco.

Matt Straus has a classic restaurant story. He started at a local McDonald's and worked his way into San Francisco's fine dining scene. After 23 years, he finally opened his own place, The Heirloom Café. Then a year later, it happened: the bad review.

If you’ve seen the movie "Chef," where Jon Favreau makes mincemeat out of a critic, you are familiar with the fantasy response to getting panned.

What went down in real life with Matt Straus was much less funny, and far more depressing. 

Straus thought he would be ruined. “It was though somebody had announced that we were the 'Emperor with no clothes,'” he says. “It was devastating.” 

But, instead of going out of business, Straus actually saw a bump in business when his regular customers came out to support him. “Many of them came up to me and said, 'Wow, that was a crazy review,'" Straus says.

The Heirloom Café was already regarded as a restaurant worth visiting. It had some good write-ups and positive comments from diners on sites like OpenTable. Plus, it had a four out of five-star rating on Yelp. Online reviews affect business more than a critic's opinion, Mat Schuster, who co-owns Canela Bistro Bar, a Spanish restaurant in San Francisco.

Yelp reviews are one of the most popular ways new customers discover his restaurant, Schuster says. He takes his Yelp ratings so seriously he uses them to reward his staff. The ratings determine bonuses for managers and the sous chef, and if servers are mentioned in a five-star review, Schuster says he gives them a $25 gift card.

Studies at UC Berkeley and Harvard University show that increasing the average Yelp rating by even half a star can have a big impact on business. 

But old-style critics still matter. Heather Irwin, a food writer and blogger in California wine country, says a review in a local paper can put a new restaurant on the map before online ratings accumulate. Plus, it makes a nice trophy. “Even though it might sound a little old fashion,” Irwin says, “the restaurants really like to have that plaque with the restaurant review from the newspaper posted in their lobby.” 

If a review does not go a restaurant's way, it's another story. Brenner, the dining critic at the Dallas Morning News, managed to make a chef and local restaurateurs so furious that they are trying to compromise the integrity of  her reviews by refusing to let her pay. Why? Because, Brenner says, “they're not happy with the star-rating system.” 

The newspaper has used the same star system for decades but that may soon change, Brenner says, as food critics adapt to compete with with the abundant and alluring food coverage online — the host of blogs that can feature sexy photos of artisanal cocktails, chi-chi barbecue and celebrity chefs. 

Some reviewers, like Brenner, are even giving up their sacred anonymity. Critics used to hide their identities so they could secretly review restaurants. That is harder to pull off these days with social media and smartphones. 

There is an upside having a more public persona – it gives critics an opportunity to build their own star power. 

The future of the restaurant critic

Marketplace - American Public Media - Tue, 2015-01-06 12:08

Local restaurant reviewer Leslie Brenner has ruffled the feathers of a chef and some restaurateurs in Dallas. She's been attacked on Twitter and Facebook, and some restaurants are not cooperating for reviews.

In an era of online reviews and food bloggers, does it really matter what one critic writes in a newspaper? More than you might think.  The Internet has changed how reviews impact the business of restaurants and how professional critics do their jobs.

A great place to see that transformation is at the crossroads of tech and dining in San Francisco.

Matt Straus has a classic restaurant story. He started at a local McDonald's and worked his way into San Francisco's fine dining scene. After 23 years, he finally opened his own place, The Heirloom Café. Then a year later, it happened: the bad review.

If you’ve seen the movie "Chef," where Jon Favreau makes mincemeat out of a critic, you are familiar with the fantasy response to getting panned.

What went down in real life with Matt Straus was much less funny, and far more depressing. 

Straus thought he would be ruined. “It was though somebody had announced that we were the 'Emperor with no clothes,'” he says. “It was devastating.” 

But, instead of going out of business, Straus actually saw a bump in business when his regular customers came out to support him. “Many of them came up to me and said, 'Wow, that was a crazy review he wrote,'" Straus says.

The Heirloom Café was already regarded as a restaurant worth visiting. It had some good write-ups and positive comments from diners on sites like OpenTable. Plus, it had a four out of five-star rating on Yelp. Online reviews affect business more than a critic's opinion, Mat Schuster, who co-owns Canela Bistro Bar, a Spanish restaurant in San Francisco.

Yelp reviews are one of the most popular ways new customers discover his restaurant, Schuster says. He takes his Yelp ratings so seriously he uses them to reward his staff. The ratings determine bonuses for managers and the sous chef, and if servers are mentioned in a five-star review, Schuster says he gives them a $25 gift card.

Studies at UC Berkeley and Harvard University show that increasing the average Yelp rating by even half a star can have a big impact on business. 

But old-style critics still matter. Heather Irwin, a food writer and blogger in California wine country, says a review in a local paper can put a new restaurant on the map before online ratings accumulate. Plus, it makes a nice trophy. “Even though it might sound a little old fashion,” Irwin says, “the restaurants really like to have that plaque with the restaurant review from the newspaper posted in their lobby.” 

If a review does not go a restaurant's way, it's another story. Brenner, the dining critic at the Dallas Morning News, managed to make a chef and local restaurateurs so furious that they are trying to compromise the integrity of  her reviews by refusing to let her pay. Why? Because, Brenner says, “they're not happy with the star-rating system.” 

The newspaper has used the same star system for decades but that may soon change, Brenner says, as food critics adapt to compete with with the abundant and alluring food coverage online — the host of blogs that can feature sexy photos of artisanal cocktails, chi-chi barbecue and celebrity chefs. 

Some reviewers, like Brenner, are even giving up their sacred anonymity. Critics used to hide their identities so they could secretly review restaurants. That is harder to pull off these days with social media and smartphones. 

Plus with a more public persona, critics have more ways to build their own star power. 

Johnson, Smoltz, Martinez And Biggio Voted To Baseball's Hall

NPR News - Tue, 2015-01-06 12:02

Three dominating pitchers and one resilient fan favorite are heading to Cooperstown, as Randy Johnson, Pedro Martinez, John Smoltz and Craig Biggio were named to Baseball's Hall of Fame Tuesday.

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Tight Control Of Type 1 Diabetes Saves Lives, But It's Tough

NPR News - Tue, 2015-01-06 11:10

Keeping blood sugar under control reduces the risk of early death for people with Type 1 diabetes, a study finds. But keeping that tight control can be hard, even for people with good health care.

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Rewatching 'The Wire': Classic Crime Drama Seems Written For Today

NPR News - Tue, 2015-01-06 11:02

As HBO releases the high-definition version of The Wire, NPR's Eric Deggans says that binge-watching the show feels more like reading today's headlines — especially on issues of race and class.

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Many Insurers Don't Cover Drugs For Weight Loss

NPR News - Tue, 2015-01-06 11:01

Despite the intensifying efforts to turn back the obesity epidemic, Medicare and many private health plans are reluctant to pay for four medicines approved to help people shed pounds.

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Consumer Electronics Show: Meet the smart home

Marketplace - American Public Media - Tue, 2015-01-06 11:00

At this week's Consumer Electronics Show in Las Vegas today, one of the growing trends among the companies exhibiting at the giant industry gathering is the so-called smart home. An explosion of gadgets aims to take objects around the home, add processors and sensors to them, and connect them to the Internet.

Listening to some of the people hawking smart home technologies, you’d think we’re all a bit paranoid.

"We have room motion sensors that will sit up on the corner ... it’s infrared so it detects heat signatures" to differentiate between pets and potential intruders, says Leah Polk, with computer accessories company Belkin.  Sensors can even be added to people, she says.

"We also have a keychain sensor, which is designed to sit on your keychain, or on your kid’s backpack or on your pet’s collar that can tell you if they’ve come or gone," Polk says.

Alarm.com strives to be the Apple of this sensor-filled world. Jay Kenny says his company can provide the platform to make everything work together.

"When the security system is disarmed, the lights can turn on, the thermostat can adjust, the garage door can close. All these things happen automatically as if they are one organism," Kenny says.

Shawn DuBravac, a senior economist with the Consumer Electronics Association, says that connecting more everyday objects to the Internet is definitely a trend.

 

To build housing, or not, for oil boom workers

Marketplace - American Public Media - Tue, 2015-01-06 11:00

When Richard Kail retired to the northwestern Wyoming town of Pinedale in the late 1990s, it was a sleepy place mostly getting by on jobs in tourism and government. Kail bought some apartments and a hotel in Big Piney, at town about 30 miles south of Pinedale. He did steady business, but nothing special. That is, until around 2005, when he started to get a lot more calls.

By the mid 2000s, a new technology called hydraulic fracturing had opened up thousands of natural gas wells around Pinedale. Hundreds of energy workers descended on the area, all looking for a place to stay.

“There were continually calls,” Kail said. “They were willing to pay just about anything you ask them. There was a real frenzy for finding places.”

The demand for housing was just too much for the area to handle, said Steve Smith, mayor of Pinedale from 2006 until last June. “At the end of the day we just couldn’t pull it together here,” he said.

Pinedale scrambled to react to the boom, but there was not enough housing, and too many energy workers searching for a place to stay. What got in the way? First, the free market.

“Everything was going up and up in Pinedale,” Smith said. “Folks that had lived here for a long time that might have been valued for $100 or $150,000 now selling for $300,000. In that market it is very difficult to find land to put in attainable housing.”

Attainable housing—housing that isn’t necessarily cheap, but is available.

The second issue is the sewer lines and roads and stoplights: all the stuff a town has to build along with housing.

“Previous administrations had long-term plans to improve infrastructure. But when you have this many new people coming, and this much new traffic on your roads..."

The third big issue, which was more of a question for Pinedale, is a little more abstract: do you make the energy workers a part of the town and a part of the community? For Mayor Smith, the answer was yes.

“I wanted those people coming into our community to be part of our community,” Smith said. “To pay sales tax and property tax and enroll their kids in school. I thought that was important, and I still do.”

Smith says locals welcomed the idea of their bars and diners filling up with energy workers. But when it came to housing, he was overruled. A housing report commissioned by the town in 2008 recommended it limit new residential development to cushion the real estate values of long-term residents. Ultimately very little worker housing was built.  

Fast forward four years, and the same scenario is playing out again, this time in the northeastern Wyoming town of Wright.  

Roger Jones has developed apartments and townhouses in energy towns in Wyoming and the Dakotas. Right now he’s building some apartments in Wright, which is seeing a surge in oil development. These construction projects take an average of one to two years, so contractors often underbuild because they don’t know how long the boom will last.

“You always want to have a waiting list,” Jones said. He said he was optimistic about the Wright project a few months ago, but the sharp drop in the price of oil recently has him concerned.

Unlike the boom in Pinedale, Wright has had plenty of lead time to track the growth of oil and gas work. Mayor Tim Albin says he wants to see the energy workers in the area living and shopping in Wright, but he says the town has to invest long-term first. That means using oil tax proceeds to build an almost $10 million recreation center, but taking it slow with housing.

“We want to build for the future and have our town be a permanent structure,” Albin said. “We are not trying to just build stuff to handle the overflow and then go ‘we don’t care what happens in two years whether it folds or not.’”

When small towns in energy states are hit with a boom, they know a bust is probably coming, too. Even with plenty of foresight, it's hard to get around the fact that investment in the needs of energy workers might not be a good investment for the town.

“I mean this happens everyplace,” said Pinedale innkeeper Richard Kail. "Nobody is prepared. Those things just happen and we adjust and--it’s a bitch.”

Coach's new shoes: Stuart Weitzman

Marketplace - American Public Media - Tue, 2015-01-06 11:00

Coach, the luxury handbag and accessories company, has made a half-billion dollar move to acquire Stuart Weitzman, the luxury footwear brand. Coach's stock price dropped by over 30 percent in 2014, and it has been looking for a way to revitalize its offering. Will a new pair of shoes do the trick?

ESPN and Dish break the cable bundle

Marketplace - American Public Media - Tue, 2015-01-06 11:00

For years, cord-cutters ditching cable had few options for live sports. Dish will soon offer an Internet streaming service that changes that. For $20 a month, its Sling TV will offer ESPN and a few other channels online. It’s an attempt by ESPN and Dish to reach millennials who have little intention of paying for traditional TV. The risk is that it will also attract existing customers who just want to save money.

CNN's ready for the apocalypse

Marketplace - American Public Media - Tue, 2015-01-06 11:00

When CNN went on the air, founder Ted Turner said: "Barring satellite problems, we won't be signing off until the world ends."

Apparently there's an actual file in CNN's video bank called "TURNER DOOMSDAY VIDEO."

The video shows a band playing "Nearer,  My God to Thee." Then the screen goes black and, apparently, we all die.

Teaching Nurses How To Speak Up — And Speak Gently

NPR News - Tue, 2015-01-06 10:59

In all parts of the world, nurses deliver most of a patient's care — especially in countries with limited medical resources. But who will train these nurses? Partners in Health has a plan.

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With The Saudi King Ailing, The Speculation Begins

NPR News - Tue, 2015-01-06 10:41

King Abdullah, who's at least 90, was hospitalized last week and Crown Prince Salman delivered an annual televised speech Tuesday. One analyst says the kingdom is stable, perhaps too much so.

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Obama Will Veto Keystone XL Legislation, White House Says

NPR News - Tue, 2015-01-06 10:34

The House, which has a Republican majority, is expected to vote on the controversial pipeline this week. The GOP-dominated Senate is considering a similar measure, which has bipartisan support.

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In Reversal, Belgium Denies Inmate's Request To Die

NPR News - Tue, 2015-01-06 10:21

Days before he was scheduled to die, inmate Frank Van Den Bleeken has been told he won't be allowed to die from an assisted suicide. His request had been granted last September.

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John Boehner Is Re-Elected House Speaker

NPR News - Tue, 2015-01-06 10:05

The Ohio Republican received 216 votes. At least two dozen fellow Republicans voted against him.

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Chronicling a CEO's 'fight to save Yahoo'

Marketplace - American Public Media - Tue, 2015-01-06 09:55

Internet giant Yahoo has been around since before the dot-com bubble burst. In the past two decades, the company has seen an alternating cast of CEOs that includes co-founder Jerry Yang and former Warner Bros. executive Terry Semel.

In his new book, "Marissa Mayer and the Fight to Save Yahoo," Nicholas Carlson chronicles the ongoing struggle to revitalize the aging tech company. One of Yahoo's many problems, he says, is focus.

"Yahoo was just too many things," Carlson says. "It was too many things on an Internet where, what really won was the eBays, the Googles, the Facebooks, which just did one thing really well."

"When they decided to hire Marissa Mayer, they decided to go with the product strategy for Yahoo," Carlson says.

Mayer became an overnight celebrity after getting the job and fielded a call from the White House.

"The co-founder of Yahoo, David Filo, rolled out a purple carpet for her," Carlson says. 

But with some investors expecting a payout from Yahoo's sale of Alibaba, how much time does Mayer have to get the company turned around?

"Marissa Mayer probably has a good amount of time ahead of her to figure this out. But it's going to be a highly pressurized time," Carlson says. "If she does give money back to investors from the Alibaba investment, Yahoo will then be a much smaller company."

In general, Carlson thinks Mayer is doing the job she was hired to do. "But at some point, you just need to come up with the iPod," Carlson says.

 

 

 

 

Read an excerpt from Carlson's book below.

 

 

 

PROLOGUE 

Bobbie Had a Nickel

Nearly four thousand Yahoo employees sat and waited for Marissa Mayer to explain herself.


It was around ten thirty on Thursday morning, November 7, 2013.

Some of the employees, those in Yahoo’s Santa Monica and New York offices, sat at their desks watching a video feed on their computer monitors.

At Yahoo’s headquarters in Sunnyvale, California, just off US 101 in the heart of Silicon Valley, almost two thousand employees sat in a huge cafeteria.

The sunlit, windowed cafeteria was called URLs. It was named that because, when Yahoo was founded almost twenty years before, all it did was serve up URLs, website addresses. The earliest version of Yahoo was a directory of links on a gray web page with a friendly logo up top.

The name also worked because URLs sounded like Earl’s, and that suited the cafeteria’s 1950s diner motif. Walking into the cafeteria, you see a sign that reads: “Eat at URLs.” The sign is one whimsical touch among many in Yahoo’s headquarters. The campus is called the Hoo. The employees call themselves Yahoos. A statue of a purple cow greets visitors in the lobby. There’s an exclamation point at the end of every Yahoo logo.

The mood of Yahoo employees that day in November 2013 was not whimsical.

Some of the people in the room were angry—angry about refused promotions and pay raises, angry that their jobs now seemed to entail an endless series of tasks done only because “Marissa said so,” or angry that new employees were coming into the company and making a lot more money. They were angry because, to them, it seemed like Marissa Mayer had said one thing and done another.

Most of the gathered Yahoo employees and executives weren’t so mad. They were just confused. They believed Mayer was brilliant, hardworking, and sincerely interested in the welfare of Yahoo, its employees, and its users. They’d decided this after Mayer came to Yahoo from Google in July 2012 and brought with her sweeping changes that reenergized the entire company.

Before Mayer joined, Yahoo’s parking lots were empty for the weekend by 4:30 p.m. Thursday. It took years for Yahoo to refresh its products, while competitors took months or just weeks. Yahoo’s apps for Android and iPhone were embarrassing.

Within weeks of Mayer’s arrival, the lots were packed and the headquarters was humming till Friday evenings. Within months, Yahoo was launching products at a pace it hadn’t hit in more than a decade. Within a year, Yahoo was winning awards and praise from the press for its product design. By the summer of 2013, tens of thousands of people were applying for Yahoo jobs every quarter. Yahoo finally had a team of hundreds working on apps for smartphones.

Now, in November 2013, the many Yahoos who had admired all Mayer’s progress wondered: Why was Mayer throwing away all the goodwill she had earned with a series of policies that were, at best, poorly rolled out and badly explained to employees or, at worst, plain mistakes. They wondered, more seriously than at any time since she joined, if Mayer was actually up for the job of saving Yahoo.

Mayer sat in front of them all, in a chair on a stage at the far end of the cafeteria. Next to her chair was a small table. Mayer had something with her. It looked like a book or a folder with an illustration on it.

A couple months before, fashion magazine Vogue published a photo of Mayer. In the photo, Mayer was lying upside down on a chaise lounge. Her blond hair was neatly fanned out and shiny like white gold. She was wearing a form‐fitting blue Michael Kors dress, Yves Saint Laurent heels, and dark red lipstick. Her eyes held the camera, gazing sideways through half‐closed lids.

That Thursday in November, Mayer looked like a different person. She looked agitated. Nervous. Her hair was wet. She wore no makeup.

Mayer knew about the confusion and the anger in the room. She’d been reading about it all week.

One of Mayer’s first moves after joining Yahoo was to institute a weekly Friday‐afternoon meeting of all Yahoo employees, called FYI. The point of the meetings was to bring “radical transparency” to a company where, for many years, employees had to learn about what management was up to by reading the press—mostly reports from a journalist named Kara Swisher.

FYI meetings would begin with a confidentiality reminder. Mayer would announce new hires and work anniversaries. Then she would go over Yahoo’s “wins of the week.” Mayer or another executive would go into “deep dives,” giving presentations on topics like why Yahoo had acquired a certain company or how a new Yahoo product worked. At the end of the meeting, Mayer would take questions from Yahoo employees and either answer them herself or ask one of her direct reports to squirm in the spotlight.

Sometimes the questions would come in live from a Yahoo employee holding a microphone in URLs. More often, the questions were submitted during the week leading up to the FYI through an application called “Yahoo Moderator” on Yahoo’s internal network. Everyone in the company could see questions after they were submitted, and employees would vote on which questions they wanted Mayer to answer that week.

Over the next year, employees asked Mayer tough questions on confidential topics, and she—or one of her top executives—would answer them with surprising candor. A popular topic: the status of layoffs and reorganizations reported on by the press. Another: Why was she blocking so many good hires? Whenever Yahoo spent millions of dollars to buy a startup, employees would demand an explanation from Mayer.

Finally, one Friday in October 2013, someone asked Mayer if she would do an FYI where the questions were submitted anonymously. Mayer said yes.

When the questions came in, they were so brutal that Mayer decided not to wait until a Friday to address them.

So now it was a Thursday: November 7, 2013. Everyone in the company was waiting for Mayer to say something to remind them that she was the CEO who was finally going to restore Yahoo to its rightful place in the Internet industry.

Mayer took a breath. She said hello to everyone. She reminded them of the meeting’s confidentiality. She said she looked through their questions and she had something she wanted to read. It had been a book in her hands, after all. A children’s book.

She began to read.

Bobbie had a nickel all his very own. Should he buy some candy or an ice cream cone?

Mayer held the book up, to show the employees the illustrations.

Should he buy a bubble pipe? Or a boat of wood?


Another illustration.


Maybe, though, a little truck would be the best of all!

Employees in URLs exchanged looks. At their desks, employees in remote offices grew confused.

What was Mayer doing? She kept reading.

Bobbie sat and wondered, Bobbie sat and thought. What would be the nicest thing a nickel ever bought?

Mayer seemed to skip a few pages. She read, with a slight agitation in her voice:

He might buy a bean bag or a top to spin. He might buy a pin-wheel to give to little Brother. Or should he buy, thought Bobbie, a little pencil box?

Mayer seemed to be reading with real frustration now, as though all of the anger and confusion in the room would just go away if everyone would just understand the story she was reading out loud.

“Bobbie thought—and suddenly a bright idea came,” Mayer read, reaching the book’s last pages.

He spent his nickel just like this ‐ ‐ ‐ ‐

Mayer held the book up to show its last illustration. It was a drawing of a little red‐haired boy riding a merry‐go‐round pony.

Hardly anyone could see the page.

No one understood what Mayer was trying to say.

* * *

 The irony is, the only reason Marissa Mayer had to explain herself to a roomful of demoralized and confused Yahoos that Thursday in November 2013 was that, a year before, she decided not to fire five thousand of them.

Actually, Mayer had to make that choice three times.

When she joined Yahoo in the summer of 2012, one of the first meetings she took was with a company executive named Jim Heckman. Heckman had been a top dealmaker for the interim management team that had immediately preceded Mayer. In that meeting, Heckman told Mayer that he had deals lined up with Google, Microsoft, and a New York advertising technology company called AppNexus. The plan was to outsource various Yahoo functions to each. Then Yahoo would be able to get rid of as much as a third of its headcount.

Within a day of the meeting, Mayer canceled all the deals and asked Heckman to leave the company.

Then Mayer had to decide what to do about Project Alpha.

Project Alpha was the code name for a massive overhaul of Yahoo begun by another one of Mayer’s predecessors, Scott Thompson. Thompson had been Yahoo CEO for only a short time—from January 2012 to May 2012—but Project Alpha was going to leave a mark. It called for Yahoo to reduce its number of data centers from thirty‐one to six and its workforce of fifteen thousand employees and three thousand contractors by as much as a third. Thompson initiated Project Alpha on April 4, 2012. When he did that, hundreds of Yahoo employees were told that eventually they were going to be fired, but not just yet. This was called getting put “on transition.”

Project Alpha sought to reduce Yahoo’s workforce by cutting whole divisions from the company rather than by examining the work of each employee in each group and identifying the poor performers who should go and the high performers who should stay, even if that meant moving to another group. When Mayer heard that, she couldn’t believe it. She quickly reduced the scope of Project Alpha and asked her top executives to recruit back into the company high‐performing Yahoo employees that Thompson had put on transition. At an FYI on September 28, 2012, Mayer told employees that Thompson’s plans had damaged Yahoo’s culture and that she wouldn’t be using the same kind of cost‐cutting tactics.

Finally, Mayer had to deal with the board, which also wanted her to fire lots of Yahoos.

When Yahoo’s board of directors hired Mayer in July 2012, the directors made clear to her that they thought she should cut headcount by as much as 35 to 50 percent.

Mayer seemed to get the idea but made no promises in her interviews for the job. She did, however, agree that Yahoo needed to reduce its costs and focus on making fewer products, better. She said that by her first board meeting, in September 2012, she would present a cost‐cutting strategy.

The notion that Yahoo needed to fire a lot of its people was conventional wisdom within the industry by the time Mayer took over in summer 2012. The week of her hire, Marc Andreessen, a widely respected startup investor who had been part of a private equity group that looked at buying Yahoo in 2011, told a reporter that Yahoo should fire ten to twelve thousand people.

So when that board meeting came in September, several directors, including hedge fund manager Dan Loeb, the director most responsible for Mayer’s hire, expected her to present a plan for layoffs.

That’s not what Loeb and the rest of the board got. Mayer told them that layoffs of any kind, let alone 35 to 50 percent cuts, would be too damaging for employee morale. She said that Yahoo’s basic infrastructure was so byzantine and jerry‐built that it would be unwise to blindly rip whole teams of people out. She said Yahoo was going to need all the talent it could find to turn around, and she didn’t want to risk putting good people on the street.

Many of the directors, including Loeb, didn’t like what they heard, and there was some tension in the room. But they’d just made a huge bet on Mayer only months before, and there was no choice but to go with her plans.

Mayer was thrilled.

On October 12, 2012, Mayer got the chance to share the good news, when, at an FYI, an employee asked if reports about layoffs were true.

Mayer, standing onstage in front of a giant purple curtain backdrop, said, “So are there secret talks going on about massive layoffs and massive reorganizations?

“No.


“Have I had conversations with people about them?

“No.

“Is this something that weighs on me?

“Yes.

“You probably have heard and seen some of the comments from Marc Andreessen and others about how many people might need to be laid off. Have I heard some of those?

“Yes.
“

Do they weigh on me?

“Yes.

“Have I been actively considering plans around them?

“No.

She said that Yahoo would still have to make some changes, but that she wanted them to be “small.”

“As of right now, we’re not looking at layoffs. We’re looking at stabilizing the organization. I can’t make a promise that there won’t be a change in that in the future, but as of right now, there’s no active planning or conversations going on.”

Then Mayer said something about how Yahoo would get “fit as a company” by setting goals and then using those goals to measure “who’s performing well” and “who’s struggling.” Few in the room thought much about what she meant by that. What they heard Mayer saying was: I’m not going to fire you, your friends, or ten thousand other people.

The Yahoos started clapping.

Mayer liked the applause.

“You should feel good about that,” she said. “That should be a giant round of applause, a big sigh of relief from everybody.”

Can Yahoo be saved?

Marketplace - American Public Media - Tue, 2015-01-06 09:55

Internet giant Yahoo has been around since before the dot-com bubble burst. In the past two decades the company has seen an alternating cast of CEOs, from co-founder Jerry Yang to former Warner Bros. executive Terry Semel.

 

In his new book, "Marissa Mayer and the Fight to Save Yahoo," Nicholas Carlson chronicles the ongoing struggle to revitalize the aging tech company. One of Yahoo's many problems is focus.

 

"Yahoo was just too many things," Carlson says. "It was too many things on an Internet where, what really won was the eBays, the Googles, the Facebooks, which just did one thing really well."

 

"When they decided to hire Marissa Mayer, they decided to go with the product strategy for Yahoo," Carlson says.

 

Mayer became an overnight celebrity after getting the job, even getting a call from the White House.

 

"The co-founder of Yahoo, David Filo, rolled out a purple carpet for her," Carlson says. 

 

But with some investors expecting a payout from Yahoo's sale of Alibaba, how much time does Mayer have to get the company turned around?

 

"Marissa Mayer probably has a good amount of time ahead of her to figure this out. But it's going to be a highly pressurized time," Carlson says. "If she does give money back to investors from the Alibaba investment, Yahoo will then be a much smaller company."

 

In general, Carlson thinks Mayer is doing the job she was hired to do. "But at some point, you just need to come up with the iPod," Carlson says.

 

 

 

 

Read an excerpt from Carlson's book below.

 

 

 

PROLOGUE 

Bobbie Had a Nickel

Nearly four thousand Yahoo employees sat and waited for Marissa Mayer to explain herself.


It was around ten thirty on Thursday morning, November 7, 2013.

Some of the employees, those in Yahoo’s Santa Monica and New York offices, sat at their desks watching a video feed on their computer monitors.

At Yahoo’s headquarters in Sunnyvale, California, just off US 101 in the heart of Silicon Valley, almost two thousand employees sat in a huge cafeteria.

The sunlit, windowed cafeteria was called URLs. It was named that because, when Yahoo was founded almost twenty years before, all it did was serve up URLs, website addresses. The earliest version of Yahoo was a directory of links on a gray web page with a friendly logo up top.

The name also worked because URLs sounded like Earl’s, and that suited the cafeteria’s 1950s diner motif. Walking into the cafeteria, you see a sign that reads: “Eat at URLs.” The sign is one whimsical touch among many in Yahoo’s headquarters. The campus is called the Hoo. The employees call themselves Yahoos. A statue of a purple cow greets visitors in the lobby. There’s an exclamation point at the end of every Yahoo logo.

The mood of Yahoo employees that day in November 2013 was not whimsical.

Some of the people in the room were angry—angry about refused promotions and pay raises, angry that their jobs now seemed to entail an endless series of tasks done only because “Marissa said so,” or angry that new employees were coming into the company and making a lot more money. They were angry because, to them, it seemed like Marissa Mayer had said one thing and done another.

Most of the gathered Yahoo employees and executives weren’t so mad. They were just confused. They believed Mayer was brilliant, hardworking, and sincerely interested in the welfare of Yahoo, its employees, and its users. They’d decided this after Mayer came to Yahoo from Google in July 2012 and brought with her sweeping changes that reenergized the entire company.

Before Mayer joined, Yahoo’s parking lots were empty for the weekend by 4:30 p.m. Thursday. It took years for Yahoo to refresh its products, while competitors took months or just weeks. Yahoo’s apps for Android and iPhone were embarrassing.

Within weeks of Mayer’s arrival, the lots were packed and the headquarters was humming till Friday evenings. Within months, Yahoo was launching products at a pace it hadn’t hit in more than a decade. Within a year, Yahoo was winning awards and praise from the press for its product design. By the summer of 2013, tens of thousands of people were applying for Yahoo jobs every quarter. Yahoo finally had a team of hundreds working on apps for smartphones.

Now, in November 2013, the many Yahoos who had admired all Mayer’s progress wondered: Why was Mayer throwing away all the goodwill she had earned with a series of policies that were, at best, poorly rolled out and badly explained to employees or, at worst, plain mistakes. They wondered, more seriously than at any time since she joined, if Mayer was actually up for the job of saving Yahoo.

Mayer sat in front of them all, in a chair on a stage at the far end of the cafeteria. Next to her chair was a small table. Mayer had something with her. It looked like a book or a folder with an illustration on it.

A couple months before, fashion magazine Vogue published a photo of Mayer. In the photo, Mayer was lying upside down on a chaise lounge. Her blond hair was neatly fanned out and shiny like white gold. She was wearing a form‐fitting blue Michael Kors dress, Yves Saint Laurent heels, and dark red lipstick. Her eyes held the camera, gazing sideways through half‐closed lids.

That Thursday in November, Mayer looked like a different person. She looked agitated. Nervous. Her hair was wet. She wore no makeup.

Mayer knew about the confusion and the anger in the room. She’d been reading about it all week.

One of Mayer’s first moves after joining Yahoo was to institute a weekly Friday‐afternoon meeting of all Yahoo employees, called FYI. The point of the meetings was to bring “radical transparency” to a company where, for many years, employees had to learn about what management was up to by reading the press—mostly reports from a journalist named Kara Swisher.

FYI meetings would begin with a confidentiality reminder. Mayer would announce new hires and work anniversaries. Then she would go over Yahoo’s “wins of the week.” Mayer or another executive would go into “deep dives,” giving presentations on topics like why Yahoo had acquired a certain company or how a new Yahoo product worked. At the end of the meeting, Mayer would take questions from Yahoo employees and either answer them herself or ask one of her direct reports to squirm in the spotlight.

Sometimes the questions would come in live from a Yahoo employee holding a microphone in URLs. More often, the questions were submitted during the week leading up to the FYI through an application called “Yahoo Moderator” on Yahoo’s internal network. Everyone in the company could see questions after they were submitted, and employees would vote on which questions they wanted Mayer to answer that week.

Over the next year, employees asked Mayer tough questions on confidential topics, and she—or one of her top executives—would answer them with surprising candor. A popular topic: the status of layoffs and reorganizations reported on by the press. Another: Why was she blocking so many good hires? Whenever Yahoo spent millions of dollars to buy a startup, employees would demand an explanation from Mayer.

Finally, one Friday in October 2013, someone asked Mayer if she would do an FYI where the questions were submitted anonymously. Mayer said yes.

When the questions came in, they were so brutal that Mayer decided not to wait until a Friday to address them.

So now it was a Thursday: November 7, 2013. Everyone in the company was waiting for Mayer to say something to remind them that she was the CEO who was finally going to restore Yahoo to its rightful place in the Internet industry.

Mayer took a breath. She said hello to everyone. She reminded them of the meeting’s confidentiality. She said she looked through their questions and she had something she wanted to read. It had been a book in her hands, after all. A children’s book.

She began to read.

Bobbie had a nickel all his very own. Should he buy some candy or an ice cream cone?

Mayer held the book up, to show the employees the illustrations.

Should he buy a bubble pipe? Or a boat of wood?


Another illustration.


Maybe, though, a little truck would be the best of all!

Employees in URLs exchanged looks. At their desks, employees in remote offices grew confused.

What was Mayer doing? She kept reading.

Bobbie sat and wondered, Bobbie sat and thought. What would be the nicest thing a nickel ever bought?

Mayer seemed to skip a few pages. She read, with a slight agitation in her voice:

He might buy a bean bag or a top to spin. He might buy a pin-wheel to give to little Brother. Or should he buy, thought Bobbie, a little pencil box?

Mayer seemed to be reading with real frustration now, as though all of the anger and confusion in the room would just go away if everyone would just understand the story she was reading out loud.

“Bobbie thought—and suddenly a bright idea came,” Mayer read, reaching the book’s last pages.

He spent his nickel just like this ‐ ‐ ‐ ‐

Mayer held the book up to show its last illustration. It was a drawing of a little red‐haired boy riding a merry‐go‐round pony.

Hardly anyone could see the page.

No one understood what Mayer was trying to say.

* * *

 The irony is, the only reason Marissa Mayer had to explain herself to a roomful of demoralized and confused Yahoos that Thursday in November 2013 was that, a year before, she decided not to fire five thousand of them.

Actually, Mayer had to make that choice three times.

When she joined Yahoo in the summer of 2012, one of the first meetings she took was with a company executive named Jim Heckman. Heckman had been a top dealmaker for the interim management team that had immediately preceded Mayer. In that meeting, Heckman told Mayer that he had deals lined up with Google, Microsoft, and a New York advertising technology company called AppNexus. The plan was to outsource various Yahoo functions to each. Then Yahoo would be able to get rid of as much as a third of its headcount.

Within a day of the meeting, Mayer canceled all the deals and asked Heckman to leave the company.

Then Mayer had to decide what to do about Project Alpha.

Project Alpha was the code name for a massive overhaul of Yahoo begun by another one of Mayer’s predecessors, Scott Thompson. Thompson had been Yahoo CEO for only a short time—from January 2012 to May 2012—but Project Alpha was going to leave a mark. It called for Yahoo to reduce its number of data centers from thirty‐one to six and its workforce of fifteen thousand employees and three thousand contractors by as much as a third. Thompson initiated Project Alpha on April 4, 2012. When he did that, hundreds of Yahoo employees were told that eventually they were going to be fired, but not just yet. This was called getting put “on transition.”

Project Alpha sought to reduce Yahoo’s workforce by cutting whole divisions from the company rather than by examining the work of each employee in each group and identifying the poor performers who should go and the high performers who should stay, even if that meant moving to another group. When Mayer heard that, she couldn’t believe it. She quickly reduced the scope of Project Alpha and asked her top executives to recruit back into the company high‐performing Yahoo employees that Thompson had put on transition. At an FYI on September 28, 2012, Mayer told employees that Thompson’s plans had damaged Yahoo’s culture and that she wouldn’t be using the same kind of cost‐cutting tactics.

Finally, Mayer had to deal with the board, which also wanted her to fire lots of Yahoos.

When Yahoo’s board of directors hired Mayer in July 2012, the directors made clear to her that they thought she should cut headcount by as much as 35 to 50 percent.

Mayer seemed to get the idea but made no promises in her interviews for the job. She did, however, agree that Yahoo needed to reduce its costs and focus on making fewer products, better. She said that by her first board meeting, in September 2012, she would present a cost‐cutting strategy.

The notion that Yahoo needed to fire a lot of its people was conventional wisdom within the industry by the time Mayer took over in summer 2012. The week of her hire, Marc Andreessen, a widely respected startup investor who had been part of a private equity group that looked at buying Yahoo in 2011, told a reporter that Yahoo should fire ten to twelve thousand people.

So when that board meeting came in September, several directors, including hedge fund manager Dan Loeb, the director most responsible for Mayer’s hire, expected her to present a plan for layoffs.

That’s not what Loeb and the rest of the board got. Mayer told them that layoffs of any kind, let alone 35 to 50 percent cuts, would be too damaging for employee morale. She said that Yahoo’s basic infrastructure was so byzantine and jerry‐built that it would be unwise to blindly rip whole teams of people out. She said Yahoo was going to need all the talent it could find to turn around, and she didn’t want to risk putting good people on the street.

Many of the directors, including Loeb, didn’t like what they heard, and there was some tension in the room. But they’d just made a huge bet on Mayer only months before, and there was no choice but to go with her plans.

Mayer was thrilled.

On October 12, 2012, Mayer got the chance to share the good news, when, at an FYI, an employee asked if reports about layoffs were true.

Mayer, standing onstage in front of a giant purple curtain backdrop, said, “So are there secret talks going on about massive layoffs and massive reorganizations?

“No.


“Have I had conversations with people about them?

“No.

“Is this something that weighs on me?

“Yes.

“You probably have heard and seen some of the comments from Marc Andreessen and others about how many people might need to be laid off. Have I heard some of those?

“Yes.
“

Do they weigh on me?

“Yes.

“Have I been actively considering plans around them?

“No.

She said that Yahoo would still have to make some changes, but that she wanted them to be “small.”

“As of right now, we’re not looking at layoffs. We’re looking at stabilizing the organization. I can’t make a promise that there won’t be a change in that in the future, but as of right now, there’s no active planning or conversations going on.”

Then Mayer said something about how Yahoo would get “fit as a company” by setting goals and then using those goals to measure “who’s performing well” and “who’s struggling.” Few in the room thought much about what she meant by that. What they heard Mayer saying was: I’m not going to fire you, your friends, or ten thousand other people.

The Yahoos started clapping.

Mayer liked the applause.

“You should feel good about that,” she said. “That should be a giant round of applause, a big sigh of relief from everybody.”

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