Industry Insights

Explained: Board Shakeup at Yahoo & Dell EMC ECD

Yahoo announced that its CEO Marissa Mayer will resign from the company's board of directors once its planned $4.8 billion merger with Verizon is complete. She is not the only one departing, though, as Yahoo co-founder David Filo along with board members, Eddy Hartenstein, Richard Hill, Jane Shaw, and Maynard Webb, will step down after the deal closes. 

First and foremost, for those who are not acquainted with Yahoo’s deal with Verizon, last July, American telecoms giant Verizon Communications entered into an agreement to acquire just Yahoo's consumer web business, which includes Yahoo Mail and Sports, for $4.83 billion in cash, marking the beginning of another chapter for a company that once defined the internet. The transaction does not include Yahoo's cash, its shares in Alibaba Group Holdings, its shares in Yahoo Japan, or Yahoo's non-core patents, called the Excalibur portfolio. Read the in-depth analysis of the deal here

The announcement didn’t only mark the board shakeup but also the future plan for Yahoo’s remaining business which owns a 15 percent stake in Chinese e-commerce giant Alibaba worth $36 billion and 35.5 percent stake in Yahoo Japan. The business will be renamed Altaba, and current board member Eric Brandt will become Altaba’s chairman, leading existing board members Tor Braham, Catherine Friedman, Thomas McInerney, and activist hedge fund manager Jeff Smith. 

If we step back to the Verizon deal, it hasn’t been a smooth process so far as hot on the heels of the announcement of the merger, Yahoo claimed that “state-sponsored hackers” took over its system to disclose the data from 500 million accounts. Just after this scandal, another breach involving over a billion accounts was disclosed. Verizon executives have said that while they see a strong strategic fit with Yahoo, they are still investigating the data breaches. Many think that the terms of that deal could be amended such as asking Yahoo for a discount worth $1 billion or Verizon may even call off the transaction. 

Why Marissa Mayer Resigned?

When the company’s pending sale to Verizon was first announced, she wrote an email to employees and stated: "For me personally, I'm planning to stay. I love Yahoo, and I believe in all of you. It's important to me to see Yahoo into its next chapter." Then, why does she step down now? Well, Yahoo unfortunately, has not changed drastically since Marissa Mayer first got there in 2012. 

When she was first appointed as CEO, she tried to apply her experience developed throughout her career in Google where she was one of the most-respected product managers. There, she invested billions of dollars in the acquisitions of Silicon Valley startups, including Tumblr, which it paid $1.1 billion for. In an effort to accelerate video exposure, the company entered into an agreement with former NBC anchor Katie Couric and former New York Times tech columnist David Pogue. 

She presumably envisioned that she could have turned it around if the site became a news organization, but the strategy didn’t result that way. After her numerous attempts such as acquisitions and product upgrades to revamp Yahoo, the company only succeeded to maintain its existing achievement, which is being one of the top most visited sites online, followed by Google and Facebook as of October 2015, but the point of hiring her was to see a significant growth in terms of product and apps. Other than its Android launcher, a travel app, and the weather app, the company couldn’t make a splash in the tech industry. In the end, employees started complaining about bureaucratic management whereas shareholders got fed up with a steep downturn in the company’s revenue during the past eight years, all these led the company to today’s acquisition. 

To circle back to the question that I stated above - “why does Marissa Mayer step down?”- this rhetorical question explains why: In the CEO and board member position, she failed to engineer a comeback as one of the most respected product managers in the industry, so, how could she turn the company around when working under Verizon’s management? Therefore, to me, it certainly makes sense for her to depart after the deal closes. 

I have no doubt that pretty soon, we will see her moving over to yet another tech titan, most likely with the same position due to her ability to act as a flag-bearer for women running big companies in Silicon Valley. To be honest, in the tech industry, the top leadership role is slanted to one gender, and we need a different standpoint that can shake up the dynamics in the space. Megan Smith, CTO of the United States Government, said in one of her talks at SxSW: “The dominant view of a geek these days is always a male with black glasses, which has caused a serious problem when it comes to girls going to engineering schools.” 

As a tech reporter and an engineer, I couldn’t agree with her more. Nevertheless, it will be interesting to watch where Marissa Mayer will land and how the acquisition of Yahoo will help Verizon gain a larger share of the booming digital advertising pie – if the company doesn't drop out of the deal, though. 

Rohit Ghai Leaves Dell EMC ECD

Marissa Mayer is not the only one who left a lucrative position with a tech titan after their company was acquired this week. Rohit Ghai, President of Dell EMC’s enterprise content division, is also stepping down and joining Dell TechnologiesRSA subsidiary as President, while the acquisition of Dell EMC by OpenText nears. His transition to RSA will be effective upon the close of the transaction of Dell EMC's Enterprise Content Division.

Michael Dell, Chairman and Chief Executive Officer of Dell Technologies, said, "Under Rohit's leadership, RSA will continue to excel as one of the industry's most pervasive and influential security brands. RSA is perfectly positioned to help customers transform their security strategies well into the future."

Since the acquisition was announced, this news marked the second top executive resignation in Dell EMC ECD after former CTO Jeroen van Rotterdam left to join Citrix as Senior Vice President of Technology last September. Ironically, these two top executives put EMC ECD back on the innovation track, especially, through announcing the new Dell EMC LEAP Platform and a new suite of cloud-native content apps

If you are interested in learning more about Dell EMC ECD’s recent innovations and the drivers behind them, I highly recommend watching our media reporter Laura Myers’ interview with Christopher McLaughlin, Chief Marketing Officer, Enterprise Content Division at EMC as he explains how LEAP puts the power of enterprise content and collaboration into the hands of their customers:



Since the announcement, the ECD customers have been confused about how the future of OpenText and ECD will impact their businesses. Although obviously, it makes sense for Rohit Ghai and Jeroen van Rotterdam to leave before it is too late, as OpenText will not need two people in each role, this news didn’t clear the air for the customers, conversely, if anything, more uncertainty has been injected. Therefore, I can’t wait to see how this deal will play out once it is finalized. 

Venus Tamturk

Venus Tamturk

Venus is the Media Reporter for CMS-Connected, with one of her tasks to write thorough articles by creating the most up-to-date and engaging content using B2B digital marketing. She enjoys increasing brand equity and conversion through the strategic use of social media channels and integrated media marketing plans.

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