Tech

Yahoo CEO Mayer wields knife in bid to save her own skin

By
Social Links for Claire Atkinson
Published Feb. 2, 2016, 4:10 p.m. ET

Under the gun, Yahoo Chief Executive Marissa Mayer on Tuesday reached for the knife.

Mayer unveiled plans Tuesday to cut the payroll of the struggling Web portal by 15 percent and said the board would explore “strategic alternatives” for its enfeebled Internet properties.

The elimination of 1,700 jobs comes as Mayer fights for her own position.

Activist shareholders have pressed the board to replace top brass at the Sunnyvale, Calif., company — which has seen its stock price tumble 34 percent in the last year.

In addition to the strategic moves, Mayer reported after markets closed that Yahoo’s profits and revenue in the fourth quarter beat expectations.

But the bar was set very low, and investor angst was not calmed.

Yahoo had profits of 13 cents a share — but writedowns of Tumblr and other brands resulted in a net loss of $4.4 billion, compared with a profit a year earlier.

Revenue gained just 1.6 percent, to $1.27 billion.

Yahoo shares slipped as much as 2.3 percent in after-hours trading after falling 1.7 percent, to $29.06, in normal trading.

In comments during a conference call, Mayer admonished the press for stories about her company’s lavish, $7 million holiday party.

That number was off by a factor of three, Mayer said, noting that the cost per attendee was a modest $150.

Asked about the confusing, three-pronged track Yahoo is on, Mayer told Nomura analyst Anthony DiClemente: “At the risk of sounding obvious, our situation is complex. We need to create the very best version of Yahoo. We also see a lot of value in the spinoff transaction.”

Mayer said the board would be taking the lead on dealing with “strategic alternatives.” Many believe Verizon will likely scoop up Yahoo and add it to AOL, which it recently bought.

Meanwhile, Yahoo reported in a filing that board member Charles Schwab is exiting. He is said to have been unhappy about the chaos inside Yahoo. A second board member, Max Levchin, exited in December.

Activist investor SpringOwl responded to the strategic plan, saying in a statement that while its voice had been heard, “We believe the strategic plan does not fully address the core issues which have destroyed shareholder value.”