Tomahawk, WI 03/18/2014 (Basicsmedia) – Marissa Mayer’s tenure at Yahoo Inc. (NASDAQ:YHOO) has been quite eventful with a few high profile acquisitions and a change to the iconic Yahoo! logo. After being appointed as the President and CEO on July 16, 2012, she has overseen the purchase of Tumblr for $1.1 billion, Summly for $30 million, RockMelt, and a partnership with Yelp Inc (NYSE:YELP) announced on March 12, 2014.
However, with FY2013 revenues of $4.68 billion, Yahoo is less than a tenth the size of search giant Google Inc (NASDAQ:GOOG). Yahoo’s fortune has been declining for many years now and it is difficult to believe that Microsoft Corporation (NASDAQ:MSFT) had made on offer in 2008 to acquire Yahoo for $44.6 billion.
Yahoo Needs More Than The Alibaba IPO
With the news about Alibaba’s impending IPO, investors have been excited about the Yahoo stock as well. But Alibaba’s IPO won’t solve fundamental problems that exist with Yahoo’s core business of search and online advertising — Yahoo does not appear to have any revenue growth potential.
Yahoo has a 24% stake in Alibaba and may get some cash in the short term by offloading some of that stake after the IPO. It may go in for share buyback like Apple Inc. (NASDAQ:AAPL). But the challenge for Yahoo is to find a way to grow again just as the challenge for Apple is to find a hot new revolutionary consumer product rather than just launching the next iteration of existing products.
Media or Technology
That question has followed Marissa Mayer since she joined Yahoo. As a search engine or email provider, Yahoo has lost and Google has won quite decisively. Yahoo has no competitor to Android, Google Drive or Google Docs.
On the content side, Yahoo Inc. (NASDAQ:YHOO) has been strong in providing online content such as Yahoo News, Yahoo Answers, Yahoo Sports and Yahoo Finance and so on. Yahoo has been trying to create more original content and has hired veteran anchor Katie Couric, New York Times technology columnist David Pogue, and Times Magazine writer Matt Bai. Other content initiatives include a deal to exclusively stream Saturday Night Live online.
All these high profile initiatives will determine if Yahoo Inc. (NASDAQ:YHOO) will still maintain an independent identity five years from now when it will be a 25-year-old company.