SAN FRANCISCO â€" CEO Marissa Mayer, celebrating one year in Yahoo's top spot Wednesday, has survived â€" and thrived â€" in one of Silicon Valley's hottest of hot seats.
But it's still too early to tell if she can reverse Yahoo's fortunes. Yahoo's earnings report Tuesday underscored the company's struggles as Mayer pushes to reinvigorate the Internet pioneer.
Yahoo's second-quarter revenue on Tuesday came in just shy of expectations as profit narrowly beat Wall Street's forecasts. Worse, Yahoo guided analysts' estimates lower for its third-quarter and full-year results. The results spotlight the work-in-progress status of its turnaround, which focuses on rejuvenating its Internet services.
Shares of Yahoo rose 1% to $27.16 in after-hours trading following the results, a vote of optimism for Mayer's turnaround efforts to date.
Before Yahoo poached Mayer from Google, the company had become a revolving door of CEOs, going through six in as many years.
Advances from Google and Facebook have steadily eaten away at Yahoo's services and advertising.
Yahoo is showing some signs of reversing course. Mayer has focused on revamping services, giving makeovers to the likes of Yahoo's Mail, News, Weather, Sports and F lickr photo-sharing, among others, in recent months.
Mayer touted the early signs of turnaround for interest in some of Yahoo's services on a conference call Tuesday with analysts, investors and members of the media.
"Renewed traffic growth in the face of multiple years of decline is, to my knowledge, unprecedented among industry players that operate with billions of page views," she said.
Yahoo has also gobbled up 17 companies in the past year in a bid to add popular services such as photo-blogging site Tumblr, which it acquired in a $1.1 billion deal in May. The move has given Yahoo, on a binge for talent, access to highly sought software engineers and designers to add to its ranks.
"That is a good strategy, even though it's not as easy as it looks. Acqui-hires don't often work because engineers often pack up and go. You have to pay retention bonuses. In principal, the idea is good," says IDC analyst Karsten Weide.
Mayer has also been aggre ssively moving to improve Yahoo's work force. Health plans have gained maternity-leave time, free food has been introduced, mobile phones have been switched from BlackBerrys to iPhones, and workers have been required to come in to the office.
Yahoo's shares have shot up more than 70% since Mayer took the top spot. But much of that is attributed to its holdings in Alibaba Group. Yahoo's stake in the Chinese e-commerce company have swelled in value, providing billions in added cash.
Advertising remains challenging. Due to gains at Facebook and Google, Yahoo's position in the $17 billion U.S. display advertising market is forecast to decline to 7.9% in 2013, down from a 9.2% share last year, according to researcher eMarketer.
"Particularly worrisome is display advertising numbers. They don't have a lot of mobile display offerings, period," says IDC's Weide.
Yahoo reported net income of $331.15 million, or 30 cents a share, on revenue of $1.07 billio n in the quarter, excluding ad commissions. Analysts were looking for Yahoo to report net income of $319 million on $1.08 billion in revenue in the quarter, according to the survey of estimates from Thomson Reuters.
In last year's second quarter, Yahoo's net income was $227 million, or 18 cents a share. Revenue, excluding ad commissions, was down 1% from last year.
Yahoo guided analysts to lower estimates for its third-quarter and full-year expectations. The company said it expects revenue to range from $1.06 billion to $1.1. billion compared with Wall Street forecasts for $1.12 billion in the current quarter.
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