Can Marissa Mayer, Yahoo's new CEO, turn around the company?

In a very surprising decision, Yahoo! announced today that they had hired Marissa Mayer as their new CEO, to replace the interm CEO Ross Levinsohn, who himself was brought on board to replace CEO Scott Thompson, who left under a cloud after having been caught lying on his resume.

Marissa Mayers is a Google veteran. She was employee number 20 at Google, at its first woman engineer. She's widely credited with building up the core search and mail properties at Google, and was recently put in charge of local and maps at Google. But it is understandable why she was looking out for a new challenge. Larry Page has cemented his control over Google over the past year, and there didn't seem to be that much for her to do at Google. I bet she didn't see a lot of growth opportunities either.

But that she would take the top job at Yahoo was unexpected, to say the least. Yahoo's troubles have been widely documented in the recent past - It's falling search marketshare, the eroding of userbase on its various properties and its overall lack of direction. Nothing says lack of identity like being the 5th CEO in 5 years.Turning around Yahoo! is going to be a huge challenge, but I think Marissa Mayer is up to it. Her main job will be to define what Yahoo stands for. I'd previously written about Yahoo's troubles and the biggest problem area is definitely a lack of vision. It's even unclear whether Yahoo is a tech company or a media company. It has wildly oscillated between the two, and that lack of vision has hurt Yahoo! badly, both in terms of products and morale.

Another area that Yahoo will have to pull up its socks is in execution. Yahoo has over-promised and under-delivered consistently in the past, and it will really need to get its act together if it has to turn around. Marissa has a lot of experience building up world-class products, and her track record at Google speaks for itself. If she can bring that same magic to Yahoo, then they have a fighting chance. The key question on everyone's mind at this point is undoubtedly - What will Yahoo focus on? Yahoo has tons and tons or products and properties, and needs to focus on just a handful and make them work.

But the biggest thing Marissa will bring is her ability to attract and retain star engineers. Yahoo has steadily been loosing talent in the last few years, and one of the first things Marissa will have to do is to stop and reverse that decline. In silicon valley circles, she's known to have "created" star engineering talent, and if she can make a few super-star, headline-attracting hires in the engineering and product areas, that can be a big shot in the arm for Yahoo's morale, something that the former internet giant desperately needs.

This is a great opportunity for Marissa Mayer and for Yahoo as well. Whether Yahoo can make this work remains to be seen, but with this bold new step, Yahoo! has a fighting chance to be counted among the tech giants once again.