Marissa Mayer to Rebuild Yahoo Labs With 50 New PhD Hires

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Douglas MacMillan and Brad Stone for Bloomberg 2013-08-02 17:02:05 UTC

Yahoo! Inc. (YHOO)'s Marissa Mayer is boosting the company's research unit, which was downsized under her predecessor — betting 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, Calif. 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 rival 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.

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.

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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% decline from 2008. As a percentage of sales, Yahoo budgeted 18% to product development last year — higher than Google's 14% spent on R&D and lower than Facebook Inc. (FB)'s 27%.

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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% to $27.97 at 2:37 p.m. New York time. The stock has jumped 75% in the past year.

Image: Brad Barket/Getty Images for WIRED