Has Marissa Mayer done a materially better job of turning around Yahoo! Inc. (NASDAQ:YHOO)’s core business than Carol Bartz? Bartz was CEO for 2 years and 9 months. By the end of this month, Marissa Mayer would have been in the job for the same duration. So how did the company perform during their respective tenures? Let’s evaluate few key metrics to compare and contrast the two regimes.
Yahoo! Inc. (NASDAQ:YHOO) under Carol Bartz
Carol Bartz became CEO on January 14, 2009. In the year prior to her taking over, Yahoo clocked $7.2 billion in revenue, $13 million in EBITDA, and had $3.5 billion in cash. Yahoo’s board fired Bartz on September 6, 2011. For 2011, Yahoo recorded $5 billion in revenue, $800 million in EBITDA, and had $2.5 billion in cash. Bartz made no significant acquisitions during her tenure and sold back some small businesses like hotjobs and zimbra.
Yahoo! Inc. (NASDAQ:YHOO)’s stock increased a mere 2.1 percent during her reign, compared to a 57 percent jump in the NASDAQ during the same period.
So, overall, under her watch –
- Core business’s revenue dropped.
- However, the core became much more profitable when compared to the period before her arrival.
- Yahoo’s stock price was flat while the NASDAQ was booming.
Yahoo! Inc. (NASDAQ:YHOO) under Marissa Mayer
Marissa Mayer was hired on July 16, 2012. During the past 12 months, Yahoo recorded revenues of $4.62 billion – a drop of 8 percent since Bartz left. EBITDA was also down 15 percent at $682 million. Marissa Mayer however spent more than $2.5 billion on acquisitions, the most significant of which include Tumblr and Flurry.
Yahoo! Inc. (NASDAQ:YHOO)’s stock price increased 3x times during her reign, compared to a 71 percent rise in the NASDAQ during the same period.
Who did Better?
So is Yahoo! Inc. (NASDAQ:YHOO)’s core business better off today than it was under Carol Bartz? The top line under Bartz did decline, but the company’s profitability significantly improved. Both these metrics have fared poorly under Marissa Mayer’s watch. The only saving grace for Mayer was the big jump in the stock price that has managed to keep many shareholders happy.
Did Carol Bartz deserve to be fired? If she did, doesn’t Marissa Mayer merit the same treatment? Mayer backers would argue that she deserves more time. If that were to be true, wasn’t Bartz entitled to receive enough time to execute her plans?
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