Yahoo CEO Marissa Mayer speaks during her keynote address at the annual Consumer Electronics Show in Las Vegas, Nevada (file). The share price of the online search and advertising company has more than doubled and widely outperformed the broader stock market since she took over as chief executive in July 2012.

Reuters
New York/San Francisco

Investors who made early bets on Marissa Mayer’s ability to turn around Yahoo Inc were well rewarded for their faith: The share price has more than doubled and widely outperformed the broader stock market since she took over as chief executive in July 2012.
But few credit Mayer’s efforts to turn around the faded Internet star for the gains.
Much of the upward trajectory was funded by an aggressive share buyback programme and Yahoo’s stakes in Alibaba Group and Yahoo Japan.
The board of Yahoo is weighing a sale of its core Internet business in meetings this week amid a broader debate about the future of the company and whether Mayer should lead it.
Despite a revamped advertising strategy that focused on mobile, sponsored content, video and social media, the company’s core Internet business has continued to lose ground to sector leaders Facebook and Google. Yahoo’s stock is down nearly a third since November 2014.
Yahoo has planned to hive off its Alibaba stake, but concerns of a massive tax bill have prompted investors and the board to consider other options.
Mayer’s entry into the company brought high hopes to a workforce that had seen four chiefs in as many years. Yahoo became a trendy place to work under her.
Mayer’s engineering background served her well in research and development, said Martin Pyykkonen, managing director of Internet, media and entertainment equity research with Rosenblatt Securities Inc.
But she did not woo advertisers well. In 2014 she overslept and left top advertisers waiting two hours at the industry’s biggest gala, the Cannes Lions in France, for instance.
“These things don’t get forgotten easily,” Pyykkonen said. “She came in three and a half years ago to a company that wasn’t growing and it’s still not growing today.”
If the core Internet company, including Yahoo e-mail, its website, the Tumblr blog site, is sold, Mayer’s chances of the option to remain CEO depend on the buyer. A private equity firm might like the way she has positioned Yahoo, while a bigger company might simply want to absorb it, said Suntrust Robinson Humphrey analyst Robert Peck.
Mayer gets credit for picking up some young companies in advertising technology, but Peck said Mayer should have been more prudent, particularly with the $1bn acquisition of Tumblr.
Less than half of Yahoo’s market cap now is attributable to Yahoo’s own business, according to a Thomson Reuters Breakingviews calculator. Its rally over Mayer’s tenure has been fueled by its stakes in Alibaba and Yahoo Japan.
Yahoo’s stock closed at $15.64 when Mayer was appointed chief executive on July 16, 2012. The gains to Wednesday, of more than 125%, widely outperform gains in the Standard & Poor’s 500, up 55% in the same period, the Nasdaq 100, up 84% and even Apple Inc, which has gained 35%, and Microsoft Corp, up almost 90%.
The company’s market capitalisation, however, has grown about 66% under Mayer. The difference is attributable to a decline in shares outstanding as Yahoo has bought back roughly $8.3bn worth of its stock since the third quarter of 2012, according to Reuters data.
Skip Aylesworth, portfolio manager of the Henessy Technology fund, sold his stake in Yahoo approximately a year and a half into Mayer’s tenure as chief executive after the company’s revenue and earnings metrics did not significantly improve.
“It is clear that time is running out for the current management and they are trying to come up with an alternative. They still haven’t resolved the long-term issue of what Yahoo will be going forward,” he said.