A longer than usual earnings call is what the Street was subjected to as chief executive Marisa Mayer sought to reaffirm Yahoo! Inc. (NASDAQ:YHOO)’s growth prospects. After one and half minutes on the podium, it all but became clear that the internet giant is in for a difficult year.
Mayer’s New Turnaround Plan
Mayer might have tried to paint a completely different picture, but at the end, she had to admit they are in a complicated mess. Throughout the call, she tried to paint a hopeful picture about Yahoo! Inc. (NASDAQ:YHOO)’s business, but as was expected; few were buying into the same.
Yahoo immediate focus at the moment is growing its maven businesses made up of mobile, video and advertising as well as social media. Cutting back on spending on products not generating significant return should be expected, according to the chief executive. One of the products set to come under pressure on cost cuts is flicker.
The embattled search giant is also looking to divest some of its real estate holdings as well as patents. The new plan might sound as simple, but if the past is anything to go by, then Yahoo is in for a tough ride. Mayer has already admitted that they are bracing themselves for a difficult year.
Uncertain Future
Even on posting impressive fourth quarter earnings the company still faces an uncertain future. Hedge fund investor, Starboard Value has already called for Mayer’s ouster as well as a spinoff of the company’s internet business. Yahoo reversing plans for a spin off Alibaba stakes has not gone well with many investors. It is a standoff that threatens to spill over into a proxy fight.
Mayer has already said their top priority at the moment is to execute inside the company until a spin-off or a sale happens. How successful she will be on the same, remains to be seen, amidst mounting activist investor pressure.
Yahoo! Inc. (NASDAQ:YHOO)’s market value has slipped below the $30 billion mark, way, less than the value of its stakes in Alibaba Group Holding Ltd (NYSE:BABA) and Yahoo Japan holdings. Mayer has been given ample time to reinvigorate the company’s prospects but seems to have fallen short of achieving anything. Pressure and criticism should be the order of the day going forward, until investors get their way as they push to unlock more value from the current assets.
