Mayer Fires Yahoo COO, Evades Accountability

So, it’s done. Unable to arrest the decline in Yahoo’s ad revenues, CEO Marissa Mayer has canned Chief Operating Officer Henrique de Castro in advance of the company’s January 28th earnings report, a move that has been anticipated for some time by Yahoo-watchers.

Mayer famously poached de Castro from her old company, Google, just fifteen months ago, paying him top-dollar to serve as second-in-command at Yahoo, where he was supposed to ignite a desperately-needed turnaround in Yahoo’s ad business.

Not only did that turnaround never come, but de Castro became engulfed in bureaucratic in-fighting with Mayer loyalists, according to re/code’s Kara Swisher.

Swisher acquired Mayer’s internal memo on de Castro’s firing. Mayer does not bother to bracket the announcement of de Castro’s firing with the usual niceties, telling Yahoos simply:

 “During my own reflection, I made the difficult decision that our COO, Henrique de Castro, should leave the company. I appreciate Henrique’s contributions and wish him the best in his future endeavors.”

Swisher’s interpretation of Mayer’s terse statement is spot-on:

In other words: I am going to try to appear honest and forthright here, hoping it will make people forget that I did the hiring, I paid him too much and I did not act sooner when it was clear that it was not working out. (De Castro is even making out like a bandit upon being bounced, with a giant payday.)

Mayer’s apparent error of judgment in hiring de Castro is striking for a couple of reasons.

In the first place, Mayer is famous for insisting on reviewing every new hire at Yahoo, which some observers interpret as decisive leadership and others as counter-productive micro-management.

Secondly, having come from Google herself, Mayer arguably should have had a sense of de Castro’s mixed (at best) reputation there. At the time he was hired, Nicholas Carlson reported pervasive doubts at Google about de Castro, even antipathy. One source told Carlson that Google should pay Yahoo to take him. Did Mayer really have no idea?

What does all this mean for Walmart, where Mayer sits on the board of directors? Does it tell us anything about her willingness to push for solutions to Walmart’s ongoing e-commerce challenges, as well as the escalating difficulties with overseas corruption, deteriorating customer service, supply chain disasters, and labor unrest?

On the one hand, Mayer side-stepped her own responsibility for de Castro’s hiring and Yahoo’s ongoing revenue problems. On the other hand, at least Mayer held someone accountable. Is it possible she will call for some accountability at Walmart? You never know, but we’re not holding our breath.


What do you think?