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Yahoo! Inc. (YHOO)’s Test Begins After Alibaba Group Holding Ltd (BABA) Deal, Says Harry McCracken

After spinning off its shares in Alibaba Group Holding Ltd (NYSE:BABA), Yahoo! Inc. (NASDAQ:YHOO) will have to show the world that it can survive and thrive on the merits of its own business, Harry McCracken tells CNBC in a discussion.

McCracken, the technology editor for Fast Company, recently wrote an in-depth report about how Yahoo! Inc. (NASDAQ:YHOO) CEO Marissa Mayer “mobilized” her company. The editor shared insights he gained during interviews with the executive for his report.

McCracken, during the CNBC discussion, agrees that the massive Alibaba Group Holding Ltd (NYSE:BABA) stake the Internet company owns has shielded it and its CEO from the negativity people have about the company’s core businesses.

“The Yahoo stock has done really well during her tenure but that is because it was a way to invest in Alibaba and they are about to spin off their Alibaba investment. So moving forward, Yahoo has to do well by being Yahoo,” McCracken says.

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Nonetheless, the Fast Company editor notes that Mayer has put some of the right building blocks to give the company a fighting chance against its better-faring rivals in the Internet industry. For example, Mayer grew the Yahoo! Inc. (NASDAQ:YHOO) mobile developer pool from about 50 to 500, McCracken says. He adds that through Mayer’s leadership, the company has made “smart” acquisitions like Flurry, a mobile analytics company, which it snapped up for over $200 million in mid-2014.

However, Yahoo! Inc. (NASDAQ:YHOO) has not rolled out “transformative” applications that are the key to boosting and evolving its business, McCracken notes.

Marissa Mayer’s company is spinning off its stake in Alibaba Group Holding Ltd (NYSE:BABA) into a separate publicly-traded company later this year which has allayed fears on Wall Street that the firm will be hit with a massive tax bill once it sells its stake in the Chinese electronic commerce giant.

By the end of 2014, Chase Coleman’s Tiger Global Management owned about 5.82 million Alibaba Group Holding Ltd (NYSE:BABA) shares. Tiger Global added the Alibaba Group Holding Ltd (NYSE:BABA) shares to its portfolio just by the October to December quarter of last year. Also by the end of last year, James Dinan’s York Capital owned about 9.4 million Yahoo! Inc. (NASDAQ:YHOO) shares.

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