The history of corporate America is littered with examples of great companies that harness an emerging technology before anyone else, grow rapidly, but invariably mature, fall into decline and sometimes collapse or disappear completely (think Kodak or Bethlehem Steel).
The most prominent exception to this trajectory is probably Apple, which underwent an astonishing renaissance when its co-founder and spiritual leader Steve Jobs returned to the fold in the late 90s. After nearly sliding into obscurity during Jobs’ years in the wilderness, Apple released a series of iconic devices and is now easily the world’s biggest company.
The Apple turnaround is arguably a one off, spearheaded by one of the most inspiring and visionary executives ever, and involving a lot of luck. But that hasn’t stopped people, particularly in Silicon Valley, from trying to reproduce it.
Like Marissa Mayer at Yahoo.
According to a new book by Business Insider’s Nicholas Carlson, excerpts of which (paywall) appear in the New York Times Magazine today, Mayer is trying to channel Steve Jobs, and it might be futile. Here is a key quote from the book:
Aswath Damodaran, a professor at N.Y.U.’s Stern School of Business, has long argued about the danger of companies that try to return to the growth stage of their life cycle. These technology companies, he said, are run by people afflicted with something he calls the Steve Jobs syndrome. “We have created an incentive structure where C.E.O.s want to be stars,” Damodaran explained. “To be a star, you’ve got to be the next Steve Jobs — somebody who has actually grown a company to be a massive, large-market cap company.” But, he went on, “it’s extremely dangerous at companies when you focus on the exception rather than the rule.” He pointed out that “for every Apple, there are a hundred companies that tried to do what Apple did and fell flat on their faces.”
Mayer is trying to return Yahoo to its former glories. She has been on a startup acquisition spree, buying at least 40 smaller companies since she took on the role. She is investing heavily in video, hiring expensive TV personalities like Katie Couric and planning to release original comedies like Netlflix. She is also trying revive Yahoo’s core products, by fighting back against Google in search and improving its mobile offerings.
Yet some shareholders would prefer she effectively wound the business up by liquidating its remaining stake in Alibaba and returning the proceeds to them through buybacks and dividends. (Alibaba has already handed them a nifty run up in Yahoo’s stock price, but subtract the value of the remaining stake and investors don’t think Yahoo’s core business is worth much.) Others would like to see a merger with AOL, which owns many content business like the Huffington Post and has a large advertising platform.
Neither is particularly appealing from the perspective of someone trying to etch their place in history.