For Yahoo's Marissa Mayer, it's time to deliver
Although her honeymoon on Wall Street hasn't ended quite yet, more concrete results are what investors will want to see.
That's a stretch, to say the least.
Mayer, Yahoo's fifth leader in four years, had nowhere to go but up. Her predecessors ran the Sunyvale, Calif., company into the ground by letting features wither to the point of uselessness and turning down a $44.6 billion buyout offer from Microsoft (MSFT) in 2008. The later move seems especially stupid, given the company's current market valuation of about $29 billion. (Microsoft owns and publishes moneyNOW, an MSN Money site.)
To be sure, things are looking up for Yahoo. As AP notes, people are spending more time on its flagship site, increasing the odds that they'll notice the ads. The company's $1.1 billion acquisition of the popular blogging site Tumblr seems especially shrewd. But not everything is hunky-dory for Yahoo, which reports quarterly results after the market closes Tuesday.
According to Bloomberg News, advertisers still aren't sold on the Mayer turnaround. They're waiting to see how all the company's disparate moves will come together, which Yahoo may not know either. Indeed, RBC analyst Mark Mahaney argues that most of the more than 70% gain in Yahoo's stock over the past year is because of "improved perceptions" regarding its holdings in Alibaba and Yahoo Japan and has very little to do with Mayer.
Expectations for Yahoo are modest. Revenue is forecast to be $1.08 billion in the most recent quarter, barely changed from a year ago. Profit is expected at 30 cents per share, versus the year-earlier figure of 27 cents. Sales are expected to increase by 2.8% in the current quarter and 1.5% for the year. Investors will soon demand better performance, and Mayer had better deliver.
Although she has said tuning around Yahoo will take years, she may not have that luxury if shareholders don't get tangible poof that the turnaround they've been promised is actually happening.
Jonathan Berr does not own shares of the listed stocks. Follow him on Twitter @jdberr.
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