“I joke that my son is about as old as my tenure here,” says Marissa Mayer, the president and CEO of Yahoo. “He showed up when I was about eight weeks in. And I just have this vision that when he gets older, we’re going to have these conversations where he’s going to be like, ‘Okay, so, Mom, your whole career was about search. Tell me what it was like.’

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And I’m going to be like, ‘Well, there was this web, and we’d crawl it, and rank it really well, and then phones came along. Smartphones! And we just took what we were doing and shrunk it down.’ And he’s going to be like, ‘Really? That was the plan?’ ” Mayer is perched on a chair in a conference room in Building D at Yahoo’s Sunnyvale, California, headquarters. With her MacBook and iPhone, a small ceramic dish of blueberries, and a bottle of Oi Ocha green tea before her, she’s explaining how imperative it is that her company figure out how to matter to consumers and marketers in the mobile era. It will be many years before her son, Macallister Bogue, interrogates her on the subject: He is not yet 3 years old. In Silicon Valley and on Wall Street, however, people have been asking questions about Mayer and her impact on the fate of Yahoo from the moment she was appointed CEO in July 2012. She came saddled with great expectations, as she had been Google’s 20th employee, its first female engineer, and the “high priestess of simplicity,” as a 2005 Fast Company cover story described her. In 13 years at Google, she had become almost as closely associated with its rise as its founders. She left all that to save an enterprise that can only be described as moribund. Over its first decade or so, Yahoo—originally launched as a hobby in 1994 by Stanford grad students Jerry Yang and David Filo—did as much as anyone to make the web fit for use by nongeeks. But as Mayer likes to point out, in the 61 months before her arrival, the company had burned through five CEOs. One, Scott Thompson, lasted less than five months before resigning in the wake of the revelation that his official biography credited him with a nonexistent computer-science degree.

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But Yahoo’s biggest crisis wasn’t PR meltdowns. It was that its core business—placing banner ads on services such as Yahoo Search, Yahoo News, and Yahoo Mail that consumers used primarily on desktop computers and laptops—was faltering. Mayer has not managed to reverse the business decline. In eight of the nine quarters that Yahoo has completed since her appointment, its display-advertising revenue has seen a year-over-year decrease. Mayer’s strategy is to make up for that shortfall—and thereby turn Yahoo back into a growth company—by focusing on four areas she has bundled into the pseudo-acronym MaVeNS: mobile, video, native advertising (i.e., marketing messages that mimic the format of the content they appear with), and social, or the monetizing of things like the 227 million blogs hosted on Tumblr, which Yahoo bought in 2013 for $1.1 billion. To put it simply, MaVeNS won’t work unless Yahoo gets mobile right, right now. “At this point, mobile is not only where the puck is going, it’s where the puck is,” says Cathleen Ryan, director of advertising for TurboTax, a longtime Yahoo advertising client. Yahoo believes there are signs that Mayer’s bet on mobile is paying off already. Some 575 million of its 1 billion users now access offerings such as the Yahoo app, Yahoo Mail, Yahoo Weather, Yahoo News Digest, and Flickr on mobile devices. Its rate of mobile growth outpaces the industry average. In 2014, the first year the company broke out mobile revenue, it reported grossing $1.2 billion in the category. “We had to build that—the people, the core competencies, the product base, the users, the traffic, and that revenue—from scratch,” Mayer says. “And we did it really quickly.” Yahoo in your pocket: from left to right, Yahoo News Digest (two screens), Yahoo Mail, Yahoo Weather, and Flickr Even observers who have trouble summoning up optimism for Yahoo’s future give Mayer grudging credit. “She’s done an extremely defensible job of removing the sense of inertia and defeatism,” says Benedict Evans, a partner at venture-capital firm Andreessen Horowitz, who is one of the industry’s leading experts on mobile strategy. “It’s one thing to do that. It’s another thing to turn it into another Google or Facebook. It’s not going to be that. Turning it into Google or Facebook wasn’t on the list of options.” Add that to the list of Mayer’s burdens: the memory that Yahoo was a big deal before companies like that even existed, and the fact that it may well never return to those heights.

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The Yahoo Mayer encountered in 2012 was making meaningful money from mobile search and had dabbled with apps such as Yahoo Axis (a search-centric browser) and Livestand (a tablet magazine akin to Flipboard). But none were particularly popular, reflecting an ambivalence about mobile within the company. Progress was bogged down by internal debates, like the one over competing approaches to building applications for smartphones and tablets. Advanced web technologies, collectively known as HTML5, let developers create a single version of a product such as Yahoo Mail to run on iOS, Android, or any other mobile operating system. Writing native apps—ones built using a specific operating system’s tools and technologies—would require more effort, but would also result in faster, more fluid experiences. Yahoo developers had leaned heavily on HTML5. “The hope was that you would develop once and it would work on anything,” explains Shashi Seth, a top Yahoo executive from 2010 to 2013. “It didn’t.” “When I got here, one of my first reviews was of a [Yahoo] Mail app for iOS,” Mayer says. “I just started scrolling. And the screen jumped and jittered. When I tapped messages, it was really herky-jerky. I played with it for about 90 seconds, and then I looked up and said, ‘This is an HTML5 app.’ And they said, ‘Well, yes, how did you know?’ I said, ‘Because it’s jumpy, it’s jerky, it’s not smooth, it’s not very responsive.’ ” Among the executives Mayer had inherited was Adam Cahan, who landed at Yahoo when it acquired his startup IntoNow. “At one point I pulled Adam out of a meeting,” Mayer remembers. “I was like, ‘I’m really, really sure that we should be building native apps.’ And he was like, ‘Me too!’ And I was like, ‘Do you realize we just came out of a room with 15 people who were really sure that we should be building HTML5 stuff?’ And he was like, ‘I know!’ So we had this moment of bonding over how important apps were, and the fact that we just needed to end the HTML5 controversy once and for all.” Adam Cahan; Already at Yahoo when Mayer arrived, he’s now its mobile chief. I ask Mayer if she ever managed to convince those who doubted that native apps would trump web apps in the long run. She bursts into her unexpectedly bumptious guffaw: “Convinced? Coached them to go elsewhere? You can pick your favorite verb.” In October 2012, Mayer put Cahan in charge of Yahoo’s mobile efforts. But he couldn’t just order up a set of native apps. According to the company, it only had 50 developers devoted to mobile efforts before Mayer’s arrival. It also didn’t have a great reputation among top-notch engineers, especially after former CEO Carol Bartz decided to outsource the guts of Yahoo Search to Microsoft’s Bing. So Mayer and Cahan embarked on a Valley-wide acquisition binge, paying premium prices for startups with significant talent.

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“When you have good people,” says veteran engineer Benoit Schillings, “it’s much easier to attract good people. It’s contagious.” One typical example: LookFlow, a six-person startup engaged in artificial-intelligence research useful for applications such as automatically tagging photos. Today, its engineers are part of Yahoo’s Flickr team. “When we started out, we very much wanted to be a big company ourselves,” says cofounder Simon Osindero, now an AI architect at Yahoo. But “Flickr was definitely at the top of the list of where I thought we could find a good home for our technology.” Simon Osindero; The computer scientist was part of Yahoo’s influx of startup talent. Mayer has been lambasted for plowing cash into so many businesses that—Tumblr aside—seemed to have so little potential. Cahan says this was the whole idea. Many of the acquired startups “had assembled a terrific team, but maybe didn’t find that product market fit, and weren’t going to that next round of funding. We would come in, quickly find those teams, inspire them about the work we were doing, and bring them on board.” When folks like Osindero then crowed about what they were up to within Yahoo, other top programmers started looking at the company in a new light. “When you have good people, it’s much easier to attract good people,” says architect and Yahoo fellow Benoit Schillings, a shaggy and genial Belgian who joined the company in 2012 from Facebook. “It’s contagious.” Today, Yahoo has more than 500 staffers devoted to mobile. In April, having concluded that its initial game of catch-up was entering a new phase, it shook things up. Cahan retains some overarching responsibility for the company’s approach to mobile apps, but Mayer has now charged him with accelerating its video efforts in much the way he did for mobile.

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“Your goal is to have a deep understanding of things and keep your muscle memory on making decisions active,” says Mayer. The best programmers need independence, a sense of purpose, and the feeling that their boss—or venture capitalist—is committed to their work. Depending on whom you talk to, Mayer is either a meddlesome micromanager or a superhelpful, superenergetic boss who loves nailing the tiny details that add up to great products. The CEO stresses that she tries not to lose herself in minutiae. “Your goal is to have a deep understanding of things, keep your muscle memory on making decisions active, and help out where you can help out,” she says. “Basically, store up your energy for things that are really going to matter. Like, ‘Should we do HTML5 or should we work on native apps?’ ‘Should we continue to invest in banner advertisements, or should we start to play with native?’ ‘Do we have the most capable and forward-looking people in the key areas of mobile, video, native, and social?’ Those are the kinds of things that only I can do, in terms of communicating priorities and switching around resources.” In 2013, for instance, Mayer needed to play catch-up on so-called native advertising. To find a quick fix, she charged three employees with assembling an all-star cast, which grew to 18 people. Mayer told the entire company that the effort was a top priority. The group named itself Moneyball, after the Michael Lewis book (and Brad Pitt film) about Oakland Athletics manager Billy Beane and his statistics-based approach to assembling a baseball club. It got a basic system for serving native ads up and running in 43 days—two days ahead of schedule. Their solution has evolved into a full-service native ad platform that’s now called Yahoo Gemini. (And each of the 18 employees was rewarded with a free vacation to Hawaii.) In many ways, Moneyball was a microcosm of what you’d hope Yahoo would be in the Mayer era: smart people accomplishing important stuff fast, with minimal overhead. “It was challenging, but it really made a difference that the entire company aligned around making this happen in so many different ways,” says VP of product Enrique Munoz Torres, who first worked with Mayer at Google. Software architect Rohit Chandra, who joined Yahoo in 2004, credits her with setting a new tone: “Her instinct is that the way to get the best things done is to get 10 engineers in the room, and tell everybody else to get out of the way.” “This was a thing that sort of knocked me over sideways when I first arrived at Yahoo,” says 26-year-old associate product manager Xanthe Travlos, who worked on Moneyball and now oversees Flickr’s mobile apps. “If you have a good idea, go and grab it.”

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Xanthe Travlos; Flickr’s smartphone manager says Yahoo has an “improv culture.” Current employees also insist that the culture works in the other direction as well, that when a decision is needed from high up the food chain, Yahoo tries to move quickly. “If I look at the decision process for mobile, it’s really Adam and Marissa,” says Schillings. “Fifty people don’t need to agree to go and ship something. You need to convince two people. And that’s very refreshing.” “There’s never been a time in which I feel like, ‘Oh, I’m waiting on Adam for something,’ ” adds Paul Montoy-Wilson, product manager for Aviate, an Android home screen, acquired by Yahoo in 2013, that helps users organize their apps and find new ones. “It’s always been Adam pushing me to think bigger and asking how he can help from an organizational standpoint.” That’s not to say that everything happens swiftly at Yahoo. Employees in the company’s media division can complain that bureaucracy substitutes for a clear sense of direction. One ex-employee reports that people still at the company grumble of months-long waits for required approvals on projects. But at least in mobile, which is a top-priority focus, Yahoo does seem to be moving fast. Paul Montoy-Wilson; His Android home-screen app became a Yahoo property in 2014. Helping the pace along is the fact that Mayer has successfully adapted her approach to design. At Google, she was a key architect of the company’s minimalistic, data-driven approach to user interfaces. Yahoo’s design is distinctly looser and quirkier—in line with the personality of a company that places an exclamation point after its name and can seem a tad fixated on its corporate color, purple. (Mayer tells me that she standardized with a shade known as Pantone Violet C, a bluish purple she prefers.) When the company built its much-praised iPhone weather app, Mayer approved of some cool and unexpected tricks, such as pulling in Flickr photos showing conditions at local landmarks rather than simply reporting the meteorological numbers. Yahoo even delayed the app’s launch at the last moment when the team came up with a nifty way to represent wind speed: tiny animated windmills. With Yahoo News Digest, Mayer helped refine the interface, which originally included boxes that automatically get checked off as users read stories. Mayer thought it made the app feel like homework, not a helpful source of information. “When we’re in the weeds of design, it’s easy to get stuck in certain places, and that type of insight really helps,” says Albert Song, VP of design. As nice as these apps are, they feel like conversation starters: products designed to prove to consumers, developers, and the world at large that today’s Yahoo is capable of creating useful tools that are also fun and forward-looking.

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Yahoo News Digest, for instance, “inherently is quite niche, because it’s a news product,” says product manager Nick D’Aloisio, who generated headlines and envy as a 17-year-old in 2013 when he sold his news-summarization startup, Summly, to Yahoo. (He’s currently a full-time Oxford student and part-time Yahoo employee.) “And so we don’t just look at purely quantitative metrics. We also look at the holistic picture of what Digest has done for Yahoo’s reputation.” Albert Song; The design VP is responsible for putting Yahoo’s imprint on each of its homegrown apps. “Yahoo has accomplished a lot in two years of playing catch-up,” says Nick O’Flaherty, strategy director at creative consultancy Wolff Olins. But “its mobile products, while thoughtfully designed, are just ‘nice to have’ versus ‘need to have.’ Yahoo needs some ‘need to have’ in its arsenal.” Mayer agrees that Yahoo still must prove that it can launch new apps that can capture the imaginations of vast numbers of consumers. She even points to a category for Yahoo-watchers to keep tabs on: communications. “We need to get Yahoo Mail to a point where we have hundreds of millions of users using our native app,” she says. “And we need to expand the definition of email to include messaging, photos, and videos, and a lot of different concepts. When you look at Yahoo Messenger and Yahoo Mail, and our legacy there, we have a lot of know-how.” At one point during our interview, Mayer shows me Yahoo Mail on her personal iPhone. Its icons have been rejiggered recently, to make it easier for users to blast through their incoming messages without straining their thumbs. The Mail team made the adjustments based on aggregated, anonymous data about how people use the app, data that was collected by Flurry, which supplies analytics technology for mobile developers. Flurry is one of the many businesses Mayer has acquired, and though it didn’t make headlines like the Tumblr deal, it could prove at least as important. If Yahoo’s mobile effort can turn around the company, it will be because Mayer has figured out how to unleash Flurry. Flurry’s mobile analytics reveal how apps get used. Mayer expects all of Yahoo’s native apps to improve thanks to changes that respond to user data collected by Flurry. An added bonus is that Flurry will help Yahoo measure its mobile success. “We’ve been investing really heavily in mobile,” Mayer says. “With Flurry we’ve been able to quantify that.”

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The best thing about Flurry, as far as Yahoo is concerned, is the fact that its analytics are embedded in more than 630,000 mobile apps, built by hundreds and hundreds of developers. Consider this: People spent 2.2 billion minutes using those apps in January alone. With Flurry, Yahoo has the potential of getting a cut of the ads served during those millions of hours, reaping money from customers who may never use a Yahoo app. In February, the company held its first Mobile Developer Conference in San Francisco and rolled out a new collection of services it calls the Yahoo Mobile Developer Suite. It includes Flurry tools, Gemini native advertising, Yahoo Search, and video ads from BrightRoll, a company that Yahoo bought in November 2014 for $640 million, Mayer’s second-largest acquisition after Tumblr. Developers can add the entire suite to an app with about the same amount of effort it would have taken to incorporate Flurry alone in the past. If the app displays ads, Yahoo will get a share of the income. “Flurry is a Trojan horse,” says Nikhil Modi, CEO of Whiz Technologies, a company that helps media brands build apps. Even with Flurry’s enormous reach, it’s not a given that the suite will take off. “Yahoo has never [really] been a platform before,” says Flurry’s ex–CEO, Simon Khalaf, who was named senior VP of publisher products in April, expanding his role to include responsibility for the Yahoo homepage, Yahoo Weather, Yahoo News, and other efforts. “They’ve never followed through. The jury is still out, but we’re committed.” Whatever happens, the fact that Yahoo held a developer conference at all was a rite of passage. In the tech industry, such events are often as much about image-building as education. “The thing that was striking to me was that Yahoo has been maligned as a company with no engineering talent, really kind of a shell with a lot of uninspired people,” says Search Engine Land contributing editor Greg Sterling. “That may have been more characteristic of previous eras than Marissa’s regime, but all the people on stage were as smart and thoughtful and enthusiastic as you’d expect. I was impressed.” In 2005, Yahoo cofounder Jerry Yang made a prescient $1 billion investment in Chinese e-commerce giant Ali­baba, which has grown more gigantic ever since. Yahoo sold half of its original stake back in 2012, and cashed in shares as part of Alibaba’s historic 2014 IPO, but it still holds a slice of the company worth more than $30 billion. That investment has kept Yahoo’s share price afloat for years, even as its advertising business has steadily declined. “We’d have company meetings, and Marissa would tell us our stock was up 50% since she started,” says one former Yahoo employee. “Or 200% since she started. It’s all Alibaba, every bit of it. And we all knew it.”

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“We’d have these meetings, and Marissa would tell us our stock was up 50% since she arrived. It’s all Alibaba,” says one ex-employee. That era will soon end. In January, the company announced that it would spin off its Alibaba stake into a separate public company, leaving a Yahoo that will look a lot more like . . . Yahoo. Which is to say, a company that struggles to achieve annual sales of $5 billion, while former peers such as Google and Facebook take in $66 billion and $12 billion, respectively. It’s a company that boasts a billion users—few of whom have any passion for the brand. And it is, to be sure, a company that’s in better shape than it was almost three years ago, when Mayer arrived. When the spin-off is completed, says Mayer, “the focus is going to come back to the core and the transformation that we’ve worked so hard on here.” But what will that mean for the future of Yahoo? After the spin-off, Mayer’s strategy will come under even greater scrutiny by activist investors such as Jeffrey Smith of Starboard Value. In recent months, Smith, who calls Yahoo’s financial performance “unacceptable,” has published a series of increasingly strident open letters to Mayer and Yahoo’s board. He has urged Yahoo to avoid further acquisitions and to find a tax-efficient way to unload its investment in Yahoo Japan, a joint venture with SoftBank that is worth billions, although not nearly as much as the Alibaba stake. He has recommended up to $570 million in cost cuts, which would reduce Yahoo to a far smaller operation with diminished aspirations. Smith has even floated the idea of a merger with Yahoo’s fellow tarnished 1990s icon AOL. Others believe that Yahoo, which has been such a rampant buyer of companies itself, might end up being acquired itself. Alibaba is often mentioned as a possible purchaser, or SoftBank. Even investors who consider themselves advocates for Mayer sense an end game in the offing. “It will be a sign of huge success, that she took a business that was struggling and turned it around so that someone pays a healthy multiple,” says Jeff Lignelli, founder of hedge fund firm Global Incline Management. Mayer, of course, doesn’t talk like a CEO who’s polishing up her company for sale. No CEO talks that way. “It’s hard to listen to the viewpoint of anyone who says, ‘Wait, the strategy should be not about building a great company for the long term, how to make the strongest Yahoo we can in 2020 or 2025,’ ” she contends. “My responsibility is to build for our shareholders the strongest, most future-leaning, fastest-growing Yahoo that I can.”

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As my interview with Mayer winds to its end, I ask her what lingering misperceptions outsiders retain about Yahoo. After an atypically long pause, she answers: “For a lot of people, it’s still in their minds as the portal they used to go to in 1995 or 2000 or 2005.” Almost every day, she says, she hears from people who are “surprised” by how good Yahoo’s mobile apps are. It’s time to stop being surprised. For the first time in years, Yahoo is positioned for some kind of future success, whether mild or bold. It’s not the company she inherited, and that’s a victory that no one—not even a cabal of angry investors—can take away from Marissa Mayer.