The Marissa Mayer effect: Yahoo shares up 5.7%

Faith Merino · October 23, 2012 · Short URL:

A breakdown of exactly how much Marissa Mayer is boosting Yahoo's value as a company

Marissa Mayer's first 100 days as Yahoo's new CEO are having a positive impact on the company's stock movement.  Yahoo shares are up 5.77% as of Tuesday at noon ET to $16.68.  

When Mayer officially took the helm at Yahoo on July 16, shares were hovering at $15.64.  That means that each day Marissa Mayer is in charge of Yahoo, she adds $0.0104 to the company's value.  

Stand back--I'm going to try math.

If my calculations are correct, that means that extrapolated outward, Marissa Mayer will have added $3.79 to the company's value in her first year. 

But it hasn't been all work-work-work.  Earlier this month, Mayer took a week off to kick back, relax, and have a baby.  Again, if my math is not more worse than I think it is, that means that each day that Marissa Mayer was giving birth, recovering, sleeping, nursing, changing diapers, and trying to figure out with her hot husband what to name the baby, she was adding $0.0104 to the company, which adds up to more than $0.07 over the course of the whole week! 

So if Marissa Mayer remains in charge of Yahoo over the course of 10 years, she will have added $37.90 to the company's value!  Clearly, you need to start coming to me for all your investing information.

The shareholder positivity is actually due to Yahoo's third quarter earnings report, which saw revenues (excluding traffic acquisition costs) of $1.09 billion, up 2% from $1.07 billion Q3 2011.  As Citi's Mark Mahaney pointed out in a research note Tuesday, that's the highest growth anyone has seen from Yahoo in four years. 

Three months after signing on as Yahoo’s new chief executive officer (and some three weeks after welcoming her first child), Marissa Mayer hopped on the phone for Yahoo’s third quarter earnings call, and the news is cheery.  The company income from operations—not including the $2.8 billion gained from the sale of Alibaba shares—totaled $177 million, up 1% from $175 million in the same quarter last year.  Earnings per diluted share were up 66% to 35 cents, beating Wall Street’s expectations of 25 cents per share.

In the call, Mayer went into a little more detail on why she took the job:

“This job is tailor made for me,” she said.  “The core business—search, mail, ads, mobile—those are the core products I built my career upon.  I came to Yahoo to grow and help redefine one of the Internet’s most beloved companies.”

Yahoo’s executive team has been undergoing something of an overhaul over the last several months, bringing on Henrique de Castro as chief operating officer; Ken Goldman as chief financial officer; Ron Bell as general counsel; Jacqueline Reses as executive vice president of people and development; and Kathy Savitt as chief marketing officer.

Mayer also explained her plans for Yahoo’s future, which involves hunkering down on Yahoo’s main products: search, mobile, content, and ads.  She seemed particularly emphatic where mobile was concerned.

“While we’ve made progress, we haven’t capitalized on mobile.  We’ve underinvested and we’ve splintered our brands.  All of this needs to change.  Our top priority is to develop a focused, coherent mobile strategy, accelerating our efforts with product managers and engineers.”

Yahoo’s content business is also booming, with three billion page views during the London Olympics, more than its page views for the Beijing and Vancouver Olympics combined.  Additionally, during the first two weeks of the political conventions, Yahoo’s page views were 45% higher and users spent 35% more time on its election-related content compared with the 2008 election.

Mayer summed up Yahoo’s path going forward quite succinctly: “We’re committed to going back to our roots as a consumer Internet company.”


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