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What next for Yahoo and Marissa Mayer?

What next for Yahoo and Marissa Mayer?

Posted by Liliana Castaño on October 13, 2014

What will happen to Yahoo, really? And, as a both a subset and a wholly independent question, what will happen to Marissa Mayer, Yahoo's CEO, and will it be sooner or later?

Yahoo's big investment in Alibaba, the Chinese e-commerce company, effectively turned Yahoo into a tracking stock—you invested in Yahoo to bet on Alibaba. But now with Alibaba public, that function, and protection, are removed. Yahoo's core business—its hodgepodge of services, news and entertainment—previously overshadowed by Alibaba, will now again drive its value.

Likewise, Mayer, its CEO, effectively a figurehead—at least in the eyes of Wall Street—for the Alibaba interest since her arrival at the company two years ago, is now more strictly accountable for Yahoo's own performance.

Mayer is a caught-in-the-headlights figure. The entirety of Yahoo's operating revenue is from advertising, and yet at two major advertising gatherings—the Cannes Lions Festival in France in June and Advertising Week a few weeks ago in New York—Mayer's strange combination of terror and somnolence became the main gossip, if not drama, of the events.

Mayer came to Yahoo after two disastrous CEO choices had opened the company to a raider's—or "corporate activist's"—interests and ostensible reforms. Dan Loeb, the raider-activist, got rid of one CEO. Then -- acting on the brainstorm of New York consultant and former MTV suit Michael J. Wolf, now reconstituted as a digital guru -- nixed the interim CEO, Ross Levinsohn, and hired the then 37-year-old Mayer from Google. In a burst of publicity and lavish press, she seemed to inaugurate a new start for Yahoo, thereby raising the share price enough for Loeb to profitably exit.

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