It was a modest achievement, given that Yahoo's revenue increased by just 2 percent last year, after its ad commissions. The growth lagged the 15 percent increase in the overall U.S. digital advertising market last year, according to the Interactive Advertising Bureau. Facebook's revenue grew 37 percent over the same period, while Google's was up 21 percent, excluding revenue from last year's acquisition of Motorola Mobility.
Mayer is now focused on redesigning Yahoo's Internet services and improving its applications for smartphones and tablets in an effort to persuade people to check in more frequently and stay for longer periods of time.
The makeover of Yahoo's home page, in particular, appears to be winning over Web surfers. In May, the total amount of time spent on Yahoo.com in the U.S. rose by 36 percent from the same time last year, according to research firm comScore. That followed a 35 percent year-over-year increase in April and a 26 percent increase in March.
The increased usage gives Yahoo more opportunities to show ads, although Mayer has repeatedly warned it may be two or three more years until the company's revenue is keeping pace with the rest of the market.
S&P Capital IQ analyst Scott Kessler said that while Alibaba is the primary springboard for Yahoo's stock, some credit also belongs to Mayer for her ideas and the credibility she brought after spending 13 years helping to build Google into the Internet's most powerful company.
"Yahoo had been thought of as an also-ran and now it's a player again. A lot of that has to do with Marissa's presence," Kessler said. "She could have done just about anything she wanted, but she chose to become Yahoo's CEO, and that said a lot."
Mayer's pedigree also has helped persuade more startups to sell themselves to Yahoo, bringing along their expertise and innovations. Yahoo's 17 acquisitions under Mayer have mostly been deals so small that the company hasn't had to disclose the price that it paid. The one exception: the Tumblr purchase.
It's a $1.1 billion gamble that Yahoo might not have afforded, if not for the cash coming in from its propitious Alibaba investment.
That 2005 Alibaba deal was pulled off by two of Mayer's frequently maligned predecessors as Yahoo CEO, former movie studio mogul Terry Semel and company co-founder Jerry Yang. At that time, Yahoo was looking for a way to reduce its direct exposure to China while still retaining some exposure to what has turned into world's largest Internet market.
Alibaba has since blossomed into one of the world's fastest growing Internet companies with revenue last year of $1.8 billion, an 80 percent increase from 2011. Alibaba's earnings more than doubled last year to $642 million.
Semel was Yahoo's CEO at the time of the Alibaba investment. He resigned in 2007 under pressure from shareholders who were unhappy with Yahoo's deteriorating financial performance. He was succeeded by Yang, whose friendship with Alibaba founder Jack Ma and connections in China paved the way for the deal. Yang resigned as CEO in late 2008 amid shareholder outrage over a squandered opportunity to sell Yahoo to Microsoft Corp. for $47.5 billion, or $33 per share.
Not long after Microsoft withdrew its offer, Yahoo's stock fell into a deep funk that kept its price below $20 for more than four years. Now, it may not be much longer before Yahoo's stock surpasses the price offered by Microsoft. The shares closed Monday at $27.34, up from $15.65 when Mayer took over.
"In hindsight, the Alibaba investment was the single greatest creation of value that Yahoo has ever done," Schachter said.
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