This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

I Prefer a Bold Marissa Mayer

By: Nicole Urken | 01/16/14 - 02:17 PM EST

Yes, Yahoo! (YHOO) CEO Marissa Mayer's decision to fire COO Henrique de Castro after only 15-month tenure reveals that Yahoo!'s core business continues to struggle.  

But is this news? No!

Just looking at last quarter, Yahoo! gave its second consecutive guide-down, with both display and search continuing to underperform.

The driver of the recent run is not based on trends for the core business at this point.

The investment case for Yahoo! continues to be Alibaba and Yahoo! Japan. And bears that pointed to the core business issues during this period have missed out on a huge run.

Mayer has the benefit of taking risks in the core business (think: expensive Tumblr acquisition for example), and being brutal at times when it comes to management decisions, because of the Alibaba halo. 

It is difficult for a company to conduct a real turnaround when public, particularly as managers need to be keenly aware of quarterly expectations and overall performance.  Hence why I argued last year that Dell needed to go private to really change.  Hewlett Packard (HPQ), upgraded by Bank of America (BAC) today even after the run, is finally making its transition work, but it went through a lot of pain before we saw some traction.

Mayer is making the move she needs to make, while protected by the Alibaba halo, so that she can make real changes in the core business--will eventually (but not yet!) be important for stock performance.

Other Posts In Nicole's Stocks and the City:

Is the robust IPO market affecting the broader indices?

04/10/14 - 03:53 PM EDT

The Momentum Tell and the Yellen Timeline

04/10/14 - 02:47 PM EDT

Under Armour is cheap! (yes, I said cheap)

03/27/14 - 06:26 PM EDT

FedEx Corp is a Buy

03/19/14 - 01:58 PM EDT

Tech in Transition: The Winners

03/19/14 - 11:01 AM EDT

Get More Investment Ideas:

To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
Real Money Pro

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Trifecta Stocks

Trifecta Stocks analyzes over 4,000 equities weekly to find the elite 1% of stocks that pass rigorous quantitative, fundamental and technical tests.

Product Features:
  • Model portfolio
  • Trade alerts
  • Recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
Stocks Under $10

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Dividend Stock Advisor

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Breakout Stocks

Bryan Ashenberg, using sophisticated stock screening and fundamental research, identifies potentially explosive small and mid-cap stocks.

Product Features:
  • Model portfolio
  • Small-cap and mid-cap focus
  • Intraday trade alerts
  • Weekly roundups
Options Profits

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
Top Rated Stocks Top Rated Funds Top Rated ETFs