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TheStreet Open House

Yahoo!'s Next Hire Will Make or Break Marissa Mayer

The remaining rise in share price comes from Yahoo!'s 35% interest in Yahoo! Japan (you may have thought Yahoo! Japan was part of Yahoo, but it's a joint venture with Japanese company SoftBank).

The company needs to bring in someone to transform the company's massive inventory and user base into a monetized juggernaut it can be. The formula is so simple even a caveman can do it. Yahoo! doesn't have to reinvent fire, just copy Google's self-serve user interface allowing everyone with a credit card to place ads.

Google's greatest advantage over Yahoo! and Microsoft (MSFT) is the self-imposed denial to allow small advertisers the ability to advertise without picking up a phone. After years of watching Google grow in size and profitability, Yahoo! and Microsoft continue to operate their advertising business as if we are still in the 1990s.

Operationally, Yahoo hasn't grown profits in over 10 years. Meanwhile, Google increased operational profits over 2,000% and Microsoft already mature managed to double its operational profits. If Yahoo!'s former CEO Jerry Yang wasn't as great of a private equity manager as he is, Yahoo probably would trade for less than $10 if it wasn't already bought out. 

YHOO Operating Income (Quarterly) Chart

I hope Mayer hires someone who can sell to Madison Avenue, but more importantly, I hope she hires someone who can sell to Main Street. Investors will want to pay close attention to Yahoo!'s new revenue officer because this person will hold the key to unlocking an incredible amount of shareholder value.

If that person gets it right, I'm a buyer with both fists. If not, expect more of the same, only without the Alibaba and Yahoo! Japan appreciation to pump the share price higher.

At the time of publication the author had no position in any of the stocks mentioned.

Follow @RobertWeinstein

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

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