Is It Time for Marissa to Leave Yahoo! Inc. (YHOO)? No. It HAS BEEN Time!

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Unless you’ve been burrowing beneath a rock for the last several years, you probably know that Yahoo! Inc. (YHOO) is in a state of turmoil. At this point, YHOO is little more than a proxy, a holding company for Alibaba (BABA) stock — which has a laundry list of its own problems, separate from the whole “Chinese markets are imploding” thing.

yhoo alibabaIt has been very clear for an embarrassingly long period of time now that CEO Marissa Mayer — who was amusingly brought in to turn around the once-thriving digital media company — has failed.

That is made all the more clear with breaking reports that YHOO is set to cut at least 10% of its workforce, or at least 1,000 people.

Unfortunately, Mayer has run out of tools with which to effect a turnaround. Since her arrival in 2012, she has been unable to revive growth in Yahoo’s core advertising business, relying entirely on Alibaba’s meteoric rise to lift the rest of the company.

At this point, there are numerous glaring reasons Mayer should be fed to the wolves. (Metaphorically.)

Firing Other People Isn’t Working

In Mayer’s first three years at the helm, Yahoo’s workforce was trimmed by 23%, thus by mid-2015 it had receded to levels not seen since 2006. I think it’s time investors call a spade a spade and try to fire someone Marissa hasn’t yet: Marissa herself.

Downsizing is an old, tired tool, and dramatic headcount cuts are often the sign of desperation and a lack of creativity. See: Twitter (TWTR).

Should Mayer go? Absolutely. A more compelling question would be why she shouldn’t go, and if anyone can answer that with a straight face, I’d like to speak to them.

She was originally brought on as CEO of Yahoo with the hopes of bringing over whatever mojo she absorbed as an early employee of Google (GOOG, GOOGL). Today, YHOO is talking about selling itself for parts and spinning off its core business to create shareholder value. That has become the only viable option.

Need I say more?

I needn’t, but I will. Another testament to Mayer’s utter incompetence: She brought on McKinsey & Co. in November to figure out if there was any way to put out the dumpster fire.

That’s right — the CEO who was brought on to change things at Yahoo hired consultants to figure out how to change things at Yahoo.

Thankfully for YHOO stock owners, there’s a prominent activist investor, Starboard Value, that’s ruffling feathers and calling for M&M’s long-overdue removal. It wrote a second letter to the board on Wednesday calling for her removal, and for the spinoff of Yahoo’s search business.

And the order of those events actually matter.

If Mayer is fired, she gets a roughly $26 million severance package, which is way too much for anyone, let alone a failed leader. But if she’s let go because YHOO is sold off, she gets an obscene $110 million package.

What, exactly, is the Yahoo board waiting for?

As of this writing, John Divine did not hold a position in any of the aforementioned securities. You can follow him on Twitter at @divinebizkid or email him at editor@investorplace.com.

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Article printed from InvestorPlace Media, https://investorplace.com/2016/01/yahoo-inc-yhoo-stock-fire-marissa-mayer-now/.

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