Marissa Mayer running out of time to turn things around at Yahoo

Marissa Mayer's nearly four-year attempt to turn around Yahoo needs a turnaround itself, repeating a pattern of futility that has hobbled one of the Internet's best-known companies for the past decade.

Like her predecessors as Yahoo CEO, Mayer has been unable to snap the company out of a financial funk despite spending billions on acquisitions and new projects. Yahoo's stock has sunk by 35 percent so far this year as investors' frustration with the follies have mounted, spurring calls for her replacement.

"This is like an 'emperor has no clothes' situation," says Eric Jackson, a Yahoo shareholder and managing director of the New York hedge fund Ader Investment Management. "The company and the shareholders would be better served with her leaving." Jackson, though perhaps Mayer's most outspoken critic, isn't alone.

After conferring with investors, SunTrust analyst Robert Peck recently wrote a letter to Yahoo's board recommending that the directors consider firing Mayer. Activist investor Jeffrey Smith of hedge fund Starboard Value is urging Mayer to abandon a spin-off of the Yahoo's most valuable asset - a $30 billion stake in Chinese e-commerce giant Alibaba Group - and sell the company's Internet business instead.

If Mayer continues down her current course, Smith is threatening to lead a shareholder mutiny aimed at overthrowing Yahoo's board next year - a rebellion that, if successful, could lead to her ouster.

Yahoo's own employees seem dispirited as well. Mayer's approval rating among those who posted on the employer-review website Glassdoor.com has fallen to 73 percent from 99 percent after her July 2012 hiring. At least a dozen members of Yahoo's management team have left in the past year. The departures have included two of Mayer's top lieutenants, former marketing and media chief Kathy Savitt and former development and acquisitions chief Jacqueline Reses. Yahoo Inc. declined to comment for this article. Mayer has repeatedly expressed confidence that Yahoo is heading in the right direction, most recently during her October review of the company's disappointing quarterly performance.