One way Yahoo CEO Marissa Mayer is trying to infuse the company with more energy and improve its brand with Silicon Valley workers is by acquiring small, mobile-oriented startups for tens of millions of dollars.
Then she puts the founders of those companies in front of the press.
This is why you’ve seen so many stories featuring interviews with Nick D’Aloisio, the 17-year-old CEO of Summly, which Yahoo recently bought for ~$30 million.
It’s also why there is a story in today’s New York Times featuring Robby Stein, the former CEO of Stamped, a small New York-based startup that Yahoo acquired for a similarly low price.
There is one problem with this strategy, however.
Despite Mayer’s personal brand, Startup CEOs remain reluctant to sell to Yahoo.
In today’s Times story, Jenna Wortham and Nicole Perlroth tell the story of one wary entrepreneur:
Shortly after Ms. Mayer joined the company last year, one Valley entrepreneur in acquisition talks with Facebook and Google reluctantly met with Yahoo on the counsel of advisers, who told him he owed it to investors to hear the company out.
At Facebook and Google, the offices were buzzing with activity, the reception desk checked him in using shiny new tablet computers and the executives working on the deal were so prepared they “basically knew what size underwear I wear,” said the entrepreneur, who spoke on condition of anonymity because he was still in talks to sell his company. Yahoo was completely different. He arrived to an empty parking lot and deserted offices. He checked in on dusty, clunky desktop computers that ran outdated Web browsers. Worse, company executives made it abundantly clear they had not bothered to read his résumé.
“I found it depressing,” he said. “It was disorganized, they hadn’t done basic due diligence, and offered no clear incentive to go work there.”
His conclusion: “They would have to be willing to pay me twice what anyone else was willing to pay to work there.”
Mayer is obviously very aware of Yahoo’s brand problem with Silicon Valley workers.
We’re told one reason she banned employees from working from home was to fill up the parking lot – to get the place more energized with workers walking and talking.
Meanwhile, a source in the deals community says that Yahoo is going to be more successful acquiring startups soon.
This source says the reason is that, unlike Google CEO Larry Page or Facebook CEO Mark Zuckerberg, Mayer is willing to meet with smaller companies, and lower-profile executives.
She’s got star power, and it is bound to bowl some people over, says our deals source.
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