Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Mayer Speaks: But Can She Deliver on Her Plans for Yahoo!?

Don't let it get away!

Keep track of the stocks that matter to you.

Help yourself with the Fool's FREE and easy new watchlist service today.

Yahoo! (Nasdaq: YHOO  ) CEO Marissa Mayer is notoriously mum when it comes to discussing the future of the $22 billion Internet search leader she took over in July, even going so far as to refuse to provide quarterly guidance. Mayer's been determined to let her actions speak for her, rather than hit the media outlets in an effort to become the "face" of Yahoo!.

That made Mayer's recent 30-minute dialogue with Patricia Sellers at the Fortune Most Powerful Women (FMPW) conference late last week that much more intriguing. Once you get past the silliness surrounding a couple of Entertainment Tonight-like quotes that went viral, Mayer provided some interesting insights into her vision for Yahoo!

Key takeaways
An overriding theme of Mayer's discussion at the FMPW was the need for Yahoo! to go mobile. The success of online advertising competitor Facebook (Nasdaq: FB  ) in transitioning to the mobile marketplace is confirmation it can happen. With more than 60% of Facebook's 1 billion users accessing its service on mobile devices, it's quickly becoming the poster child for adaptation.

Mayer's vision is that everyone at Yahoo!, from the sales department to the tech geeks, and everyone in between, needs to understand the industry's most popular operating systems. The Yahoo! OS mandate includes getting a handle on Google's (Nasdaq: GOOG  ) Android, Apple's iOS, and Microsoft's new Windows 8.

Yahoo!'s objective is to leverage its strength in online content to develop new, cutting-edge apps compliant with the mobile industry's leading operating systems. As Google has proved with its open-source Android OS, if you build systems that give mobile users easy access to what they want, they will come.

Beyond developing apps in-house, the future of Yahoo! includes building strategic partnerships with mobile OS leaders, as it did with Samsung. But partnering with Google? Sounds a little strange, but not exploring it as an option is old-school thinking. Mayer's made it clear she has an eye toward Yahoo!'s future, while at the same time firmly planted in the here and now. Aggressively developing new partnerships, and the supplemental revenue opportunities they represent, is a must as Yahoo! strives for a return to glory.

Yahoo! online advertising and search sales aren't likely to be swept under the Yahoo! revenue rug anytime soon, nor should they. Ad and search combined for about 80% of Yahoo! revenues last quarter. But as competition for online advertising dollars increases, mitigating shareholder risk and driving substantial, long-term growth requires supplementing Yahoo!'s existing revenue streams.

Going forward
The recent news regarding the lawsuit in Mexico, in which the preliminary ruling is for Yahoo! to pay $2.7 billion in damages, hasn't fazed investors as Yahoo! hits two-year highs in its share price. According to Yahoo!, there doesn't seem to be much merit to the case, or the ruling, and you can bet it isn't giving up its strong, new-found cash (thanks, Alibaba!) without a fight.

Mexico aside, Yahoo!'s shift to a multifaceted, content-driven solutions provider is the right one, but it's certainly not alone. AOL (NYSE: AOL  ) is making strides in its efforts to become a content-rich destination site. The Huffington Post, along with AOL's video service On Network, aren't just extremely popular; they generate significant revenue.

It's a crowded playing field, and Mayer is working hard to get Yahoo! back in the game. For what it's worth, there are a few big hitters on board with Mayer and the Yahoo! team. York Capital added more than 11 million shares last quarter, and famed investor David Einhorn is in Yahoo!'s camp, too. Why? Yahoo!'s outstanding balance sheet, even after it accounts for deferred taxes from the Alibaba sale, and its relative value compared with the industry, remain attractive for value seekers.

It could be a while before we hear from Mayer again, but that's OK. Actions speak louder than words anyway, and for Yahoo! investors, so far, so good.

Facebook hasn't been around as long as Yahoo!, but there are similarities. Using their strongest assets -- site visitors -- to generate shareholder value is at the top of the list. There are things every investor needs to know about Facebook, and we've outlined them them all in our newest premium research report. There's a lot more to Facebook than meets the eye, so read up on whether there is anything to "like" about it today, and we'll tell you whether we think Facebook deserves a place in your portfolio. Access your report by clicking here.


Read/Post Comments (0) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2139563, ~/Articles/ArticleHandler.aspx, 10/28/2016 12:47:19 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 3 hours ago Sponsored by:
DOW 18,169.68 -29.65 -0.16%
S&P 500 2,133.04 -6.39 -0.30%
NASD 5,215.97 -34.29 -0.65%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/27/2016 4:00 PM
YHOO $41.87 Down -0.21 -0.50%
Yahoo CAPS Rating: **
AOL.DL $0.00 Down +0.00 +0.00%
AOL CAPS Rating: *
FB $129.69 Down -1.35 -1.03%
Facebook CAPS Rating: ***
GOOGL $817.35 Down -4.75 -0.58%
Alphabet (A shares… CAPS Rating: *****