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Yahoo! Inc. (YHOO): Did Marissa Mayer Defend Herself Well?

Let us talk a little more about Yahoo! Inc. (NASDAQ:YHOO)‘s CEO, Marissa Mayer, and her style of management. Although, it might have been one of the most down trodden topics this year, but new developments have been made which require our attention. However, ‘new’ might be an inappropriate word to use in the context of Mayer’s slow and steady philosophy, in which slowness is much more striking than the steadiness.

Alibaba Group Holdings Ltd (NYSE:BABA)

Michael Liedtke, in his article on Newsfactor Business Report shed light on the situation that Yahoo! Inc. (NASDAQ:YHOO) is in, following its recent earnings report. After slightly beating analyst estimates, Yahoo is pretty much in the same spot as before, with its core operations hardly fetching any valuation on the Wall Street, and its investments in Alibaba and Yahoo Japan seem to be the only components of its stock price.

In essence, Mayers just bought herself more time. She didn’t give any news that Yahoo! Inc. (NASDAQ:YHOO) investors are dying to hear. These concerns primarily revolve around two issues. Yahoo’s merger talks, which had earlier been prompted by the activist company, Starboard Value, and the tax efficiencies that Yahoo! Inc. (NASDAQ:YHOO) could benefit from in liquidating its remaining stake in Alibaba.

The tax issue is a critical one for Yahoo! Inc. (NASDAQ:YHOO) and could prove to be considerably valuable for the company. According to Liedtke, Yahoo! gained $9.5 billion in pre-tax gain from the sale of some of its stake in Alibaba during the IPO, which translated into $6.8 billion gain for the company. Yahoo! Inc. (NASDAQ:YHOO) still has $38 billion worth of stock left in Alibaba, and if the company were to liquidate those assets, the tax bill for that is going to eclipse the one that Yahoo just paid.

Mayers, has widely been criticized for her investments including 30 or so acquisitions, according to the article. In her earnings call, she defended herself by saying that these acquisitions have made Yahoo! Inc. (NASDAQ:YHOO) much more competitive in the mobile device market, but the slight 1% increase in revenue for the last quarter, can hardly be used as an evidence for that. The clock is ticking on Mayers to post some real numbers.

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