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Despite Wall Street Noise and Sale Rumors, Yahoo Board Backs Mayer

Will the Silicon Valley Internet giant get sold? Not yet!

As the old saying kind of goes, reports of the impending demise of CEO Marissa Mayer at Yahoo are greatly exaggerated. And so are rumors that the board of the Silicon Valley Internet giant is poised to sell off the entire core business.

Consider the Wall Street Journal’s reporting last night that there is some extra-special, hair-on-fire series of meetings taking place this week to consider selling off Yahoo’s Internet assets and also perhaps change its plans to spin off its stake in China’s Alibaba Group unit.

In fact, the meetings are actually Yahoo’s typical multi-day annual board meeting always held in December. At this one, directors plan to weigh recent advice from management consultants McKinsey & Co. — which Re/code first reported on here — of which parts of the company to unload, as well as consider the status of the complicated and somewhat troubled Alibaba spinoff.

According to sources, the state of the Yahoo spin of Alibaba will be top of mind, especially due to pressure from activist shareholder Starboard Value, which the company has not yet addressed. After pushing for it previously, Starboard recently sent a letter to Yahoo demanding that it not spin off its Alibaba asset, since it is not clear — regulators have declined to rule — if the transaction will be tax-free. Thus, argued Starboard, Yahoo should instead sell off all the rest of Yahoo.

At this moment, the spinoff is still on as planned for early January. In fact, sources tell me Yahoo has already selected a CEO for Aabaco Holdings, which is the name of the spinoff. But that could change, as Yahoo faces pressures from Starboard and other investors.

As for the other assets at Yahoo that will remain — including an $8.5 billion stake in Yahoo Japan — the current plans are to unload a number of units and cut resources to others also remaining in place.

Could that turn into more than just a simple restructuring and turn out to be more? Sources said that is premature, even if the possibility must be raised by Yahoo directors to show they are listening to investors and responding to activists like Starboard.

But what’s going on now also has echoes of what Twitter just went through — rumors largely generated by those interested in goosing Yahoo’s stock and a willing media ready to help generate froth. Did Twitter ever sell to Google? Nope, but that did not stop rumors that its board was thinking of selling from proliferating endlessly.

Still, where there is smoke, there is some fire.

What is happening, added these sources, is that a number of private equity companies are beginning to contemplate how they can benefit from the still lucrative business Yahoo has, despite its continued woes. Sources have told me that giants like TPG are most serious, though none are far down any path to buy all (or even part) of Yahoo.

“Everyone is waiting under the basket to see what happens,” said one top PE exec, who stressed that there are no concrete offers. A private Yahoo has been contemplated before and, in fact, might be the exact right way it should be structured to return to health.

One thing that could be interesting — at least I think it could be more likely — would be an outright purchase of Yahoo by a big telco looking for content and ad tech, much in the same way AOL was acquired by Verizon.

There are numerous candidates here, as well as some possible international buyers, such as SoftBank (the biggest owner of Yahoo Japan). All that said, Yahoo would still be a pricey purchase for anyone, even after it spins off Alibaba.

This could be just the out that would save Mayer’s reputation, which has been severely challenged of late, despite previous gushing profiles of her that have painted her as a savior well ahead of any real victory.

In recent weeks though, after posts in both Re/code and also Forbes that have chronicled the mounting troubles for Mayer and her attempt at turning around Yahoo, there have been a sudden spate of ever-more-breathless media stories that has increased the drumbeat around Mayer’s precarious fate.

Now, let’s be clear, I have been a strong critic of the former Googler’s performance for a long time and also have been dubious that the very gifted Mayer had any kind of special magic mojo that could save the long-troubled Yahoo.

And, far be it from me to argue that Mayer does not deserve intense scrutiny for her overall lack of progress as leader there for more than three years. While giving it a yeoman’s effort with all kind of schemes — from buying talent all over Silicon Valley via acquisitions of startups to paying big bucks to goose its media offerings to diving headlong into a questionable effort to revive its search business — the results of her tenure have been lackluster at best. In one area, the move to mobile, Mayer has been spot-on, but the monetization still lags.

Overall, she has been plagued by profound secular shifts in online advertising and consumer behavior that are impossible to battle. Simply put, what Yahoo did and still does, fewer and fewer people do. Mayer cannot turn that inevitable tide.

Still, Yahoo’s current state is also very much her fault — Mayer has not created one innovative product since she arrived in a splashy and hyped manner, has made some spectacularly bad and pricey hires (hello, Henrique!) and has exhibited a proclivity for shifting strategies willy-nilly.

She has also been an inspirational and now polarizing leader — with both a knack for raising morale, but also for dashing it. There is no question that talent exodus taking place now that is troubling for Yahoo is related to a belief inside the company that she cannot succeed.

Hence, the recent spate of firing stories.

“Marissa Mayer May Be Running Out of Options at Yahoo” was the title of one post in Fortune, which was mostly a big fan of Mayer’s until recently. “Should Yahoo CEO Marissa Mayer Be Fired?” screamed CNNMoney, basing its report solely on a list generated solely by SunTrust Robinson Humphrey analyst Robert Peck of possible CEO replacements.

Now, I enjoy Peck as much as anyone — he poked at Twitter relentlessly — but his report was not based on any actual search proceeding, though there have been rumors of that, nor any concrete proof that Mayer was on some kind of brink of being fired. (Also, Bob: Facebook’s Sheryl Sandberg on your list makes me certain this is all just dartboard guessing — she would never ever ever ever do it in a million zillion years.)

In fact, while even the Journal insinuated that her job was on the line, according to numerous sources, the board of Yahoo is still strongly backing Mayer as CEO. (Of course they are — she picked a lot of them!)

“She has not lost support of the board,” said one source with knowledge of the situation.

That said, could Mayer suddenly decide it was all too much? Sure. If so, would she engineer an exit that would be part of a larger transaction? More likely — in my humble opinion, if Mayer leaves, it will be on her own terms.

It may not come to that. Sources added that the directors have hopes that a lot of the current strife around the company will disappear if the Alibaba spinoff is done and the decision about how to restructure Yahoo is more clear. But that is most likely to come after the new year, said sources.

And there is also one more personal wrinkle to consider: Mayer will also be taking what she called in a blog post in September a “limited time away” due to her expected delivery of identical twin girls this month. Still, she also added that in what will be a short maternity leave, she would be “working throughout.”

With all the swirl around Yahoo now, it looks like Mayer was right about that.

This article originally appeared on Recode.net.