Reses will be heading up Square Capital, the company's cash advance service
Something is happening over at Yahoo right now, and it doesn't help Yahoo's image, nor its embattled CEO. Since April, the company has been losing top executives at a rapid pace, including some of Marissa Mayer's top hires.
And now Jackie Reses, Yahoo's Chief Development Officer, is the latest to go, as she has joined the team at Square, where she will be running Square Capital, its cash advance service. The move was announced in a press release on Monday. Rese becomes the latest executive to leave, adding to at least a dozen departures over the last few months.
Reses was hired by Yahoo in September of 2012. She had previously worked at Goldman Sachs for seven years, before leading the U.S. media group at Apax Partners.
While at Apax Partners, Reses was heavily involved with investing in media and technology businesses, while also working in the company’s talent initiatives, including recruiting and training. Reses was named one of Crain’s New York Business’ “Most Influential Women,” and was one of Dealmaker magazine's “Dealmakers of the Year." So bringing her on board was obviously a big get for Mayer and for Yahoo.
In the ensuring years, Reses became one of Mayer's top advisors, according to Re/Code, but her departure became imminent when Yahoo decided to spin off its assets from Alibaba Group by the end of 2015. Reses happens have been a member of the Board of Directors at Alibaba since December of 2012, two months after she joined Yahoo.
While Reses' departure has to sting, it becomes even more ominous for Mayer given that it is part of a much larger pattern of executives leaving.
In addition to Reses, who officially left last week. the company also saw the departure of Lisa Licht, its head of marketing partnerships. Mike Kerns, Yahoo's SVP of the homepage and verticals, left the company in April to join The Chernin Group as president of digital. Kerns actually pre-dated Mayer at Yahoo, but she was the one who appointed him to his position in August of 2013.
One of the biggest departures was that of CMO Kathy Savitt, who had been one of Mayer's first hires all the way back in August of 2012. She left in September to join STX Entertainment as its president for digital operations.
Since executives started resigning in April, shares of Yahoo have dropped 25% from around $45. Of course, the market has also been declining so part of the downside has to do with the overall negative market sentiiment. And since Mayer has taken over, shares have still more doubled, going from $15.65 on the day she took to $33.51 at the end of trading on Monday.
A mass exodus is just the latest sign that Mayer's tenure at Yahoo may be soon coming to a close.
Mayer has gotten a lot of flack recently from company shareholders regarding her leadership, with many going after the company's spending spree, in which it bought up a slew of startups, including 27 in 2013 alone.
At least two major shareholders were actively courting AOL CEO Tim Armstrong last year to merge with Yahoo so that he could take over. In September of last year, Starboard Value LP sent a letter to Mayer, urging her to purchase AOL. That obviously did not happen, and the company was instead bought by Verizon earlier this year.
Many seemed to be giving Mayer the benefit of the doubt, especially given how much the company's stock had been rising under her leadership, but now investors are increasingly becoming less convinced that her turnaround plan will work. Now even her own employees don't seem to believe in her anymore.
A good hire for Square
Something that should not be lost in all of this is that this is a great move for Reses and a good hire for Square, as the company looks to diversify its revenue streams as it prepares its IPO.
Square Capital was launched in May of last year as a way to provide simple access to funds for businesses to grow. Through the program, businesses automatically pay Square as a set percentage of daily card sales, between 4% and 10%. What that means that they pay more when sales go up, and they pay less when their sales are down. The percentage taken out of sales is in addition to Square’s normal processing fees.
So, to give an example, if a business requests $10,000, Square would deposit that amount in their bank account. The business would owe Square capital $11,000 and would pay 10% of its daily card sales.
Businesses are expected to pay off the advance within 10 months, though the company says that, "the total cost to the seller never changes, regardless of how long it takes to pay Square."
Given Reses' experience as Yahoo working with revenue and product partnerships, strategic acquisitions, and operational and people transformation, she will be tasked with expanding Square to a broader set of customers.
“Jackie’s understanding of the financial services industry and her background in tech and investing make her the perfect fit to lead Square Capital, and I’m thrilled she is joining our leadership team,” Jack Dorsey, CEO of Square, said in a statement.
VatorNews has reached out to Yahoo for comment on Reses' departure. We will update this story if we learn more.
(Image source: businessinsider.com)