Marissa Mayer is gearing up for yet another turnaround plan for Yahoo! Inc. Given the company's persistent growth slump, even a sweeping overhaul may do little to fend off activist investors threatening to wage a proxy war aimed at her removal.
Yahoo’s chief executive officer, who has overseen falling sales in seven of the past 10 quarters, promised to detail a plan to cut costs and boost growth. The effort, set to be announced with quarterly earnings Tuesday, will probably include job cuts, a person with knowledge of the matter has said.
Once a major gateway to the wealth of information, communities and entertainment on the internet, people have in recent years ditched Yahoo in favor of Google, Facebook and other companies at the centre of people's digital lives.
Since her hiring in 2012, Mayer has made scant headway in efforts to restore growth at the Web pioneer. Now, she's mired in a complex project to decouple Yahoo's main business from its $25 billion stake in Alibaba Group.
Activist investors dissatisfied with progress have all but threatened a proxy war. “She’s almost out of time,” said Ryan Jacob, who manages Yahoo shares as part of his Jacob Internet Fund. “At this point, it’s hard to imagine a proxy fight being averted. I would welcome it, given the changes at Yahoo have just been incremental. That’s what’s been frustrating shareholders for years.”
While boasting more than 1 billion users, Yahoo has struggled to keep pace with growth in online advertising, with Yahoo’s share of the US market projected to shrink to 3.5 per cent in 2017 from 5.1 per cent in 2014, according to EMarketer Inc.
Analysts project 2015 revenue, minus sales passed on to partners, will fall 8.2 per cent to $4.04 billion, its biggest decline since 2009.
Bloomberg
