NEW YORK (TheStreet) -- Yahoo! (YHOO) became sexy when Marissa Mayer took over. And her performance at first seemed miraculous. The stock price has more than doubled since she became CEO in July, 2012. Analysts still pound the table for it.
But many investors have gotten wise to the cause. It's all down to the higher assumed value of Alibaba, the Chinese e-commerce site in which Yahoo maintains a stake. Analysts are starting to ask hard questions about Mayer's leadership over the actual company. The knives are out for her.
The reason for that can be seen in the financials. Yahoo! had $1.34 billion in revenue for the fourth quarter of 2012 and $1.26 billion for the fourth quarter of 2013. It had $933.7 million in gross profit for the fourth quarter of 2012 and $926.3 million in gross profit for the fourth quarter of 2013.
Yahoo! was a media company when Mayer took over and, despite a host of acquisitions meant to improve its technical chops, it's basically still a media company. (TheStreet.com (TST) has a content sharing agreement with Yahoo! Finance.) Wall Street has one set of valuations for tech companies, another for media companies. The media valuations are lower.
But Yahoo! is trying to be a better media company, integrating advertising into its editorial product, something that's easiest to see at Yahoo Food.
The new site looks like a Tumblr, which Yahoo bought for $1.1 billion last year, promising not to "screw it up." The page is a collection of wall-to-wall pictures inside boxes, which open to well laid-out articles, and return to the Tumblr-like page when you hit the "back" button.
Some stories come from magazine "partners," some are staff-written, but others are "promoted" -- they're actually ads -- like this one on throwing a brunch from Country Crock, a product that used to be called "margarine" when I was a kid.
Tumblr is becoming the style sheet for other Yahoo! media properties, such as Yahoo! Tech, for which the company has been hiring staff lately.
Tumblr may still be around, but Yahoo! has shuttered 31 of the 38 companies acquired under Mayer, leading some reporters to call it a "destroyer of start-ups." Most now look like expensive "acqui-hires," buying companies to hire the people.
The question is, what are the people doing that generates more revenue and more profit?
Mayer is also making real hires, and here again she seems to be looking for names, hiring Alex Stamos this week as chief information security officer.
Stamos is best-known to reporters as co-organizer and host of TrustyCon, a security conference meant to counter the industry's RSA Conference, which critics thought was getting too cozy with government. In response to the TrustyCon threat to its headlines, RSA brought in Stephen Colbert as a speaker to make jokes at the NSA's expense.
Stamos' job will be to make Yahoo itself more trustworthy. He has his work cut out for him, as my daughter learned last week when her email credentials were hacked and her Yahoo! Mail account suddenly started sending spam to her friends.
This sums up Yahoo!'s problem under Mayer. There has been a lot of change happening on the surface, a lot of flash, but underneath it's the same old Yahoo! with the same old problems, and the same fading reputation among the young people whose loyalty it needs in order to grow.
That needs to change, soon, or as soon as Alibaba's value is known, the reason to own Yahoo! stock will be gone. Analysts may then start talking about a divorce from the stock, and from Mayer.
At the time of publication, the author owned shares of YHOO and GOOG.
This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.