News Digest

Yahoo CEO Marissa Mayer defends strategy in face of criticism

Yahoo CEO Marissa Mayer staunchly defended her strategy during a Tuesday presentation that addressed recent criticism leveled by activist investor Starboard Value – which contends that since Mayer became CEO in July 2012, it has been wasting money on ill-advised acquisitions and a bloated payroll while mismanaging its stake in the Chinese Alibaba Group. Mayer described the $1.6 billion she spent on more than 30 acquisitions as smart investments that have made Yahoo more competitive in the mobile-device market. She also highlighted cost-cutting measures that have included closing eight offices, dumping 65 products and jettisoning about 1,600 contractors.

This team has now been in place for two years and we’ve achieved much more than many people realize.

Yahoo CEO Marissa Mayer

Yahoo’s revenue during the three months ending in September rose by just 1 per cent from last year to $1.15 billion, a dramatic contrast to the 20 per cent increase posted by rival Google. Yahoo’s share of the roughly $141 billion worldwide market for digital advertising now stands at 2.4 per cent, down from 3.9 per cent in 2011, according to the research firm eMarketer Inc. Google holds a 32 per cent share while Facebook shares stands at 8 per cent. Investors gave Mayer a vote of confidence Tuesday, prompted in part by the third-quarter earnings. Yahoo’s stock added $1.50, or 3.7 per cent, to $41.68 in extended trading. When Mayer arrived in 2012, Yahoo’s stock was trading at just $15.65.