One year under Mayer, Yahoo no longer 'dead company walking'

In her first year as CEO of Yahoo, Marissa Mayer focused on acquisitions, mobile

After a year with Marissa Mayer at the helm, Yahoo is no longer seen as a "dead company walking," according to one analyst.

An Internet pioneer whose fortunes declined to such a degree that it was regarded as a second-rate afterthought in recent years, Yahoo isn't exactly as cool as Instagram or as much of a powerhouse as Facebook or Google. But it's staging a comeback.

Marissa Mayer
Yahoo CEO Marissa Mayer has made more than 16 acquisitions in her first year, most with a focus on mobile services. (Photo: Stephen Lam/Reuters)

Analysts say we haven't seen the best tricks that Mayer may be planning.

"Mayer has changed Yahoo internally much more than it appears externally. It will take until 2014 for these changes to make a major difference," said Patrick Moorhead, an analyst at Moor Insights & Strategy. "With Mayer at the lead, Yahoo has a chance of regaining a lot of ground lost under prior leadership. They aren't viewed anymore as 'dead company walking.'"

The company's fiscal situation has improved: In its second-quarter financial report, released Tuesday, Yahoo announced that nearly a dozen product launches helped it tally net earnings of $331 million for the quarter, up 46% from $227 million a year earlier. But its second-quarter revenue of $1.14 billion was down 7% from the same period a year earlier.

Troubles at the top of Yahoo

On July 17, 2012, Mayer, who had been a top-line executive at Google, officially became Yahoo's CEO. She was Yahoo's third CEO in less than a year, and industry analysts unanimously agreed she had a huge job ahead of her.

Yahoo had suffered from the top down.

In September 2011, Yahoo pushed out then-CEO Carol Bartz and hired Scott Thompson, who had been president of eBay's PayPal division, as its CEO in January 2012. Five months later, Thompson was out amid a public scandal surrounding the inaccurate reporting of his academic credentials on his resume.

With Thompson out, for the second time in eight months, the company was not only in an embarrassing spot, but was without a CEO.

As if all of that didn't create enough challenges for Mayer, Yahoo also had more than its own share of business troubles.

The company had been an Internet giant -- a household name -- in the early days of the Web. But it went off track, sliding into the background as new companies like Google, Facebook and Twitter took the lead in innovations.

In the months leading up to Mayer's hiring, speculation swirled that Yahoo was up for sale and that Microsoft and Google were both looking to scoop it up.

"It's a bit of a train wreck," Rob Enderle, an analyst at the Enderle Group, said of Yahoo the week that Mayer took over.

Today, analysts generally agree that Yahoo isn't "fixed," but it is on a path to recovery.

"Yahoo has been going through unsettling changes for years," said Hadley Reynolds, an analyst at NextEra Research. "While the pace of change itself has probably accelerated under Mayer, she gets credit for bringing a stop to the company's negative churn and getting the company moving in a [positive] direction again."

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