Turbulent waves call for skilled, resilient captains.  Marissa Mayer is one such captain.

Since taking the top spot at Yahoo! Inc. (NASDAQ:YHOO) in July, Mayer has implemented a number of structural changes to Yahoo’s business models and culture. Here are a number of the positives.

Mayer Makes Ground

• Mayer pulled a page out of Google Inc (NASDAQ:GOOG)’s playbook and increased employee perks to foster a better environment.  (Think free cafeteria food.)
• Since taking office, Yahoo has improved its content properties like Yahoo Mail and Flickr.
• Yahoo “acqui-hires,” meaning the company bought smaller companies for their developer talent, as well as for their products.
• Yahoo’s search revenue, powered by Microsoft Corporation (NASDAQ:MSFT)’s Bing search engine, increased 14% year-over-year, excluding commission payouts.
• Revenue for the most recent quarter increased 2% year-over-year.

There’s More in the Hopper

And a lot more changes are one the way.  For example, Mayer is positioning Yahoo to take on more business from mobile traffic.  In aggregate, Yahoo content sites currently get above 200 million unique mobile visitors per month.  Mayer agrees that mobile is a “nascent source of revenue,” but she is prepping the company to develop new tools to improve its monetization of mobile traffic.  I believe that in the future, this will prove to have been a wise investment.

Moreover, Mayer plans to continually customize its content for people, based on where they live, what they like, and their background.  Think customized Google search and highly-relevant advertisement and product recommendations.  Also, I believe that Yahoo will get better at customizing for user preferences if it is able to grow users of its e-mail service, and especially if it launches a browser that can gain considerable traction.

Finally, Mayer plans to continually launch “smart partnerships.”  For example, Yahoo provides certain data for Apple Inc. (NASDAQ:AAPL)’s Siri service on iPhone.  I think that smart affiliations like the Apple partnership will go a long way toward increasing Yahoo’s distribution.  Now that we know the good, here’s the bad.

Continual Erosion

Despite the gains, Yahoo still faces a host of obstacles.  For example, Yahoo’s display ad revenue – its core business – dropped 5% year-over-year.  This includes sales from video, interactive, and graphical ads.

Also, I believe that people are “trained” to use Google’s search algorithm.  Venture capitalist Bill Gurley wrote an interesting post on this topic, where he only used Microsoft’s Bing search engine for an entire two months.  I recommend taking a look at his short post, called “My Life with Bing.”  His experience is insightful and explains Google’s embedded competitive advantage in search.  However, at the end of the day, many argue that Yahoo's and Bing's search is just as good (if not better) than Google's - but it all comes down to what people are used to using.