Marissa Mayer has been in the thick of Wall Street debates since her appointment as Yahoo! Inc. (NASDAQ:YHOO) CEO last year. A section of analysts have fully thrown their weight behind her acquisition and human resource restructure strategies while some have clogged the media with all sorts of negative commentary on the same. Despite the evident divide among analysts on Mayer’s strategies, investors are, for the most part, bullish.
Since July 16, 2012, to date, Yahoo! Inc. (NASDAQ:YHOO)’s share price has grown around 74%. There is some real daylight between Mayer’s turnaround performance and that of her predecessors. And even as Yahoo! Inc. (NASDAQ:YHOO) follows through with more acquisitions, the rewards of this strategy are slowly but surely gathering on the horizon.
It’s all about timing
At present, I wouldn’t say that things at Yahoo! Inc. (NASDAQ:YHOO) are all that rosy. E-marketer contends that Yahoo!’s stake in total global ad revenue dipped to 3.1% from 3.4% in 2012. This came even as Google Inc (NASDAQ:GOOG) increased its share of the pie from 31% in 2012 to 33%. Similarly, social media giant Facebook Inc (NASDAQ:FB) increased its share to 5.1% from 4.1%.
Unlike her predecessors, Mayer isn’t pressing her staff to hastily advance innovative products that can level the playing field and gnaw into competitors’ ad revenue in the near-term. Instead, she is focusing on setting a solid platform that will stage future market share battles. In my assessment, this approach is wisdom at its best. It makes no sense to wage a direct battle against a giant like Google at this time.
Google Inc (NASDAQ:GOOG) can easily leverage its position in mobile to seal Yahoo! Inc. (NASDAQ:YHOO)’s entry points into the mobile front. As it is, YouTube, Google’s video-sharing service, has tripled its ad sales on mobile devices over the past six months alone. And considering Android’s growing user base, there is no denying that Google’s momentum in mobile hasn’t fully played out.
Facebook Inc (NASDAQ:FB) mobile, on the other hand, despite receiving criticism at the outset, is finally securing a footing. E-marketer projects that Facebook Inc (NASDAQ:FB) will earn $2.4 billion in mobile advertising this year, this will signal a more than 400% increase compared with 2012.
Yahoo!, despite having an inherent ability, should maintain the temporary tepid disposition that Mayer has established. If it goes on the offensive, both Facebook and Google Inc (NASDAQ:GOOG) will seal the entry points into the mobile sector. Considering that mobile has now become the primary point of contact with consumers, Yahoo! would greatly lose out if its entry was thwarted. This would not only set things out of order, but it would suppress turnaround prospects as well.