Yahoo’s Mayer to Rebuild Research Group With 50 PhD Hires

Yahoo! Inc. (YHOO)’s Marissa Mayer is boosting the company’s research unit, which was downsized under her predecessor, as the chief executive officer bets on emerging technologies from big data to artificial intelligence.

Yahoo Labs has hired 30 researchers with PhDs in 2013 and plans to add another 20 by year-end, Mayer said in an interview at the company’s Sunnyvale, California headquarters last week. The group is led by Chief Scientist Ron Brachman, a former scientist at the U.S. agency that helped invent the Internet.

In addition to trying to revive Yahoo through acquisitions and a focus on mobile, Mayer is investing in new projects after four straight years of reduced spending on research and development. Yahoo Labs, set up in 2005 as an incubator for academic-style research and bold experimentation, suffered cuts last year during the brief tenure of former CEO Scott Thompson, leading to the departure of group founder and leader Prabhakar Raghavan to Google Inc. (GOOG)

“The lab is still here -- it’s been reduced in size,” Mayer said. The company is investing “heavily to build it back up,” she said

Job openings listed on Yahoo’s website include a research scientist specializing in mobile, a senior principal scientist in personalization and a research scientist in pricing and marketplaces.

Photographer: Johannes Eisele/AFP via Getty Images

Marissa Mayer, CEO of Yahoo!, attends a session of the World Economic Forum 2013 Annual Meeting. Close

Marissa Mayer, CEO of Yahoo!, attends a session of the World Economic Forum 2013 Annual Meeting.

Close
Open
Photographer: Johannes Eisele/AFP via Getty Images

Marissa Mayer, CEO of Yahoo!, attends a session of the World Economic Forum 2013 Annual Meeting.

Brachman, who helped build Yahoo’s research group when he joined the company in 2005, previously spent three years at the U.S. government’s Defense Advanced Research Projects Agency (Darpa), which helped create the Internet in the 1960s. Before that, he led research on artificial intelligence at AT&T Inc.’s Labs.

R&D Spending

Some of Yahoo Labs’ focus areas are in mobile, content personalization and predictive analytics. Recent projects include a search engine that asks users for more context about their queries and an analysis of political opinions drawn from messages posted to Twitter Inc.

Yahoo spent $885.82 million last year on product development, which includes R&D, a 27 percent decline from 2008. As a percentage of sales, Yahoo budgeted 18 percent to product development last year, higher than Google’s 14 percent spent on R&D and lower than Facebook Inc. (FB)’s 27 percent.

Talent Search

The recruiting boost reflects Mayer’s broader effort to attract top Silicon Valley talent. She has spent more than $1.2 billion on a startup takeover spree that has netted Tumblr Inc. founder David Karp and Nick D’Aloisio, the whiz-kid teenager who founded news reading app Summly. Two former Yahoo executives, Jeff Bonforte and Amit Kumar, rejoined the company after Mayer purchased their respective startups, Xobni Corp. and Palaran Inc., last month.

The CEO has also worked to put engineers back at the center of the largest U.S. Web portal. Yahoo’s technology council, a governing body of eight leaders that includes co-founder David Filo and Chief Architect Amotz Maimon, is critical in the approval of new products.

“If I don’t sign off and say it’s excellent from a product standpoint, and if David Filo or Amotz don’t sign off and say it’s excellent from tech-council standpoint, it doesn’t happen,” Mayer said.

Yahoo fell less than 1 percent to $27.96 at the close in New York, leaving the stock up 75 percent in the past year.

To contact the reporters on this story: Douglas MacMillan in San Francisco at dmacmillan3@bloomberg.net; Brad Stone in San Francisco at bstone12@bloomberg.net

To contact the editor responsible for this story: Pui-Wing Tam at ptam13@bloomberg.net

Bloomberg reserves the right to edit or remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.