Vote for Marissa: Yahoo is cool againNovember 6, 2012: 12:09 PM ET
The opinions expressed in this commentary are solely those of Paul R. La Monica. Other than Time Warner, the parent of CNNMoney, and Abbott Laboratories, La Monica does not own positions in any individual stocks.
On this Election Day, let's play a fun little game. If Yahoo (YHOO) CEOs were U.S. presidents, most of them would be unsuccessful one-term (or less) inhabitants of the Oval Office.
Terry Semel was like Jimmy Carter. Seemed like a good idea at the time. Jerry Yang would be Andrew Johnson. Clearly in over his head and later "impeached" for turning down the Microsoft (MSFT) takeover offer.
Carol Bartz? Meet Herbert Hoover. Little went right during either of their reigns -- although I'm not sure if Hoover cussed as much as Bartz. Interim chiefs Tim Morse and Ross Levinsohn were like Gerald Ford. They both became CEO by default and didn't last long on the job.
And even though Scott Thompson is still among the living, he'd be William Henry Harrison. His four-month tenure as Yahoo CEO barely tops Harrison's one month as commander-in-chief. Or maybe he's Warren Harding, another president who didn't survive long enough for a re-election campaign. (Spoiler alert for Boardwalk Empire fans. Harding should be dying soon, right?)
But with new CEO Marissa Mayer, does Yahoo finally have its Teddy Roosevelt, Ronald Reagan, Franklin Roosevelt or Bill Clinton? I figure it's fitting to name both popular Republican and Democratic presidents since red and blue make Yahoo's trademark color, purple. Plus, I also don't want angry comments about how I'm choosing one party over the other! (I'm a registered Independent.)
Shares of Yahoo were up slightly Tuesday, hitting a 52-week high in the process. The stock has gained more than 10% since Mayer was hired in mid-July. Much of the gains have taken place since the company reported third-quarter results in October. Yahoo has easily outperformed the Nasdaq as well as Microsoft, Apple (AAPL) and Facebook (FB). The only major tech company Yahoo has lagged is Mayer's previous employer, Google (GOOG).
So is the Mayer hype warranted? Eric Jackson, founder of hedge fund Ironfire Capital, thinks so. Jackson said he's owned Yahoo stock since December 2010 and it's now his biggest long position. Jackson has followed the stock for years: As a shareholder in the mid-Aughts, he actively urged the company to dump Semel, which it wound up doing in 2007. Jackson sold his stake after the Yang-Microsoft debacle in 2008.
Despite the problems under Bartz, Jackson said he bought into Yahoo again because he felt the market was ignoring the potential for the company to do something to unlock the value of its many Asian assets. Now that Yahoo finally has done so, agreeing to sell half its stake in Alibaba in exchange for more than $7 billion (it plans to return $3 billion of that to shareholders ), Jackson said he's more excited than ever to be a Yahoo shareholder ... and that's largely due to Mayer.
"She is head-and-shoulders above anybody Yahoo has ever had as CEO. Mayer has a clear knowledge of the company's strengths and where it needs to improve," Jackson said. "A turnaround is not going to happen overnight, but it's a relief to finally have a CEO talking in a levelheaded way."
Jackson said that with Mayer, the company at long last has an executive who understands content and technology. He is hoping that Mayer will push Yahoo to invest more in advertising technology -- a move she has already taken by purchasing mobile start-up Stamped for its engineering staff -- and enhance its own popular sites, like photo-sharing service Flickr.
"Flickr has been dying on the vine," Jackson said. "It would be silly for Yahoo to not do more and exploit some of its sites with huge traffic."
How high could Yahoo's stock go under Mayer? It may not be a stretch for it to one day return to Microsoft's final offer price of $33 per share in 2008, Jackson thinks. (It originally proposed a bid of $31 per share before sweetening it.) Yahoo is still nearly 50% below that level, but Jackson points to AOL (AOL) as a company that Yahoo could emulate.
AOL, after being spun out of CNNMoney parent Time Warner (TWX) in late 2009, was a hated stock at first. Its shares have enjoyed an amazing rebound as CEO Tim Armstrong's focus on content, such as The Huffington Post and local news network Patch, is starting to pay off. Shares of AOL surged more than 15% Tuesday after the company reported third-quarter results that topped forecasts.
"Armstrong stabilized the core business and has been able to get AOL growing modestly in online advertising. This could be the playbook for Yahoo. AOL was a hated stock at about $10 a share, and now it's near $40," said Jackson, who does not have a position in AOL.
It's obviously too soon to say if Yahoo under Mayer will enjoy as healthy as a rebound as AOL. But for what it's worth, Armstrong is also a Google alum -- and it looks like investors are more than happy to see ex-Googlers now running some of Google's competitors.
Mayer may not have a Reagan-esque or Clinton-esque impact on Yahoo when all is said and done -- but she's definitely not looking like a Hoover or Carter.