If you follow the tech news, you heard that Marissa Mayer just became CEO of Yahoo!

The big question is what happens next, which products/services become a priority and what direction does Mayer take Yahoo.

We need to understand how Yahoo describes their business currently, here are a few quotes from their 10-K, Yahoo is a “premier digital media company” and “Yahoo! Properties currently fall into three categories: Communications and Communities; Search and Marketplaces”

Their revenue is generated from three areas: Display, Search and Other.  Display generates $2.1B or 43% of revenue.  Search generates $1.8B in revenue or 37% of revenue.  Other generates $970M in revenue or 20% of revenue. If you look at the revenue trends of these areas, search revenue is decreasing, other is decreasing but display is roughly consistent the last few years.  It is not a surprise that search revenue is decreasing, they have been losing marketshare for many years, Yahoo is in third place when it come to search engine traffic, behind Google and Microsoft.

A few thoughts and suggestions as to what happens next for Yahoo:

1. There are 14,100 Full Time employees at Yahoo (per their 10-K).  That is a lot of employees and provides a great opportunity for Yahoo to reassess and identify their star players.  There will be some additional lay-offs
2. They have $2.2B in cash and short-term investments.  Similar to what Facebook, Google and Twitter are doing, they can make some acqui-hires or small acquisitions ($100M or less), mainly to bring on new product people with specific skill sets
3. Hire 20+ highly competent/skilled developers to engage the startup communities in areas such as Bay Area, LA, Seattle, Boulder, Austin, Boston, NYC, Durham, Tel-Aviv, London, Berlin, Shanghai etc.  These would be developer outreach professionals, helping spread the word about some of Yahoo’s APIs (current and future) and scouring the communities to identify developer talent
4. Bring on a handful of professionals to engage the investor community, specifically to identify emerging startups that could be partnership opportunities and/or acquisition targets.  These people would work with accelerators such as Y Combinator, Techstars, 500 Startups, etc. and early stage funds such at SV Angel, Lerer Ventures, 500 Startups, First Round Capital, True Ventures, etc.
5. Ad-tech is an evolving sector and there are always some new technologies being developed, there is an opportunity to make a few acquisitions in this space, especially since display is their main revenue stream
6. They need to make a big push on mobile, they don’t seem to have any strategy in this area, this includes viewing content, communication and ecommerce
7. ecommerce is big opportunity and they should become a player in this area.  There continues to be a trend of content and ecommerce being done in unison.  Yahoo can integrate ecommerce to existing content
8. They have some interesting things on high-end content (video) and would like to see them focus more in this area.  I like what YouTube is doing with its premium channels, could see Yahoo doing something similar
9. Become specialized in a few verticals within search where they can become the number one player
10. Flickr is a property that needs some immediate attention.  Either enhance this area and focus on people profiles (such as Facebook) or sell it off it is not part of their core offering
11. They need to figure out what they do with Alibaba.  There has been some bad blood between both companies but Mayer might be able to fix that relationship