Yahoo's Marissa Mayer Surprise: What Will Ross Levinsohn Do?

Ross Levinsohn was passed over at Yahoo in favor of Google’s Marissa Mayer. If the popular executive leaves, who else will follow him?

Updated on Tuesday at 2 pm:

Talk of Marissa Mayer's appointment continued on Tuesday, with Brad Garlinghouse, the CEO of Yousendit, complaining that he was misquoted in a Business Insider story on the topic.

"I said that I think it was a bold decision and potentially brilliant," Garlinghouse told TheWrap, shortly after a panel where he'd addressed the topic in passing. "I was misquoted. I said she hasn't been CEO before and will have to partner with others on her team."

Business Insider posted a story that quoted Garlinghouse saying that Mayer was not experienced enough to be CEO. The story has subsequently been amended (that was fast!).

Garlinghouse is a former Yahoo executive and self-described friend of Ross Levinsohn.

Previously:

At a tech conference convened on Monday in Aspen, the discussion onstage was drowned out by the talk in the corridors about the surprise choice of Marissa Mayer as the new CEO of Yahoo marissa mayerand what it means for interim CEO Ross Levinsohn, who was passed over for the job.

“They’ve doubled down on vision versus hierarchy,” said Martha Josephson, a veteran executive recruiter in Silicon Valley who knows Mayer well, referring to the Yahoo board. “They did what they’re supposed to do. They took the best mind and didn’t worry about the risk. Marissa is going to make this company cool again.”

Also read: Yahoo Names Google Executive Marissa Mayer CEO

Not everyone was so sure she would.

“It will be a struggle,” said one Google executive at the Fortune conference who declined to be named. “She’s never managed more than 10 to 20 people. She’s a product person who hasn’t managed sales, business development, human resources and all that. Her problem is not product innovation — she’s a great innovator. The question is about the rest of the company.”

Mayer, 37 and pregnant, was supposed to appear at the conference on Tuesday. Instead, she starts her new job as CEO of the troubled Internet portal with which she once competed.

At Google, Mayer played a key role in shaping products like the homepage, Google News and Gmail.

At Yahoo, her first problem will be this: How does she get Levinsohn, a valuable executive who has been ardently pursuing a content-first strategy, to stick around?

Also read: Yahoo Interim CEO Ross Levinsohn To Staff: 'I Still Believe'

Levinsohn, a veteran of NewsCorp. and Hollywood mainly as the head of Fox Interactive Media, has a loyal team around him, particularly chief revenue officer Michael Barrett and content leader Mickie Rosen. Knowledgable insiders say they are at Yahoo only because Levinsohn is there.

“If Ross goes, there’s going to be a wake you can ski off of behind him,” said one executive who knows him and the company well.

Most observers, and no doubt Levinsohn himself, thought he was going to get the top job. He has been accelerating deals in the months of his interim status, and pointing Yahoo definitively toward a content-first identity.

The fact that he didn’t get the job is a humiliating blow by the board and a tacit rejection of his efforts in recent months to drive the company forward. Those efforts have included bringing Barrett on board and content initiatives like a partnership with ABC News.

Levinsohn did not respond to my calls or emails, so his status remains unclear.

It is possible that the board gave him a bonus to stay. It is also a reality that there are few media jobs on the planet that would give Levinsohn the leadership opportunity and the salary afforded by Yahoo.

But what would be his role under Mayer? Levinsohn was already the chief sales officer at Yahoo North America, a job he is not going to go back to after being interim CEO.

When I asked one former colleague at the conference what Levinsohn’s strength is, there was a pause.

“Politics,” came the answer.  “He was one of the most popular guys in the studio business,” said the former colleague. “Ross is a long-ball hitter who gets dinged for not turning the wrenches.”

This executive said that if Levinsohn goes, then Barrett — who joined Yahoo recently and is independently wealthy from several start-ups he sold — will certainly go, as will Rosen and business development leader Jim Heckman, whose advertising start-up Yahoo bought last year.

None of that will necessarily prevent Mayer from succeeding. But she will need to define the company’s identity, rather than just engineer new products.

The scuttlebutt at the conference was that for Mayer to succeed, she will need to radically downsize the company that is bloated at 14,000 employees. (Layoffs of 2,000 were announced in April.)

“It’s still a great asset,” said one executive, “if you get it down to size.”

Homepage photo of Mayer credit: Getty Images