In the third quarter of 2012 Marissa Mayer's first three months as chief executive of Yahoo the company had about $1.2 billion in revenue, most of it from advertising. Three years later, its revenue was still $1.2 billion.
While Yahoo was treading water, younger companies like Google and Facebook were zipping ahead, riding a huge wave of advertiser interest in digital media. Now, 20 years after its founding, Yahoo, which still has a billion people using its apps and websites, is an afterthought in many ad budgets.
"There's not a perception of 'Yahoo's going down the tubes and we can't spend with them," said Katie Ashafa, an advertising executive at the agency Trilia Media, whose clients include Dunkin' Donuts, TJX Companies and Chili's. "It's just that we've shifted how we're spending."
As Yahoo's board of directors holds its annual strategy review this week and considers selling all or parts of the company, there is no obvious way to fix that problem. And that stagnation has prompted some on Wall Street, most vocally the Starboard Value hedge fund, to call on the board to give up and sell Yahoo's business to a cable or telephone giant, an Internet company or a private equity firm.
In her 3 1/2 years as Yahoo's chief executive, Mayer has yet to introduce any products that have dazzled Internet users, investors, business partners or employees.
Although Mayer set a goal of making Yahoo a leader in mobile services, video, native advertising and social media, she has, at best, gotten the company an entry in those races. Meanwhile, competitors like Google and Facebook have widened their lead in visitors, products and advertising, making it all the harder for Yahoo to regain even a semblance of its past glory.
"It's been well over three years and I don't think there are any strong signs that a turn is at hand," said Scott Kessler, an Internet analyst with S&P Capital IQ.
Yahoo declined to comment on the board meeting or its plans.
What to do with Yahoo is made more complicated because its basic business is a small part of the value of the company to investors.
Yahoo's most valuable assets are its 15 percent stake in the Chinese e-commerce company Alibaba, a holding worth about $31.8 billion if Yahoo could sell it on the open market, and its 35 percent stake in Yahoo Japan, a holding worth about $8.6 billion.
Combined, that's far more than the $34 billion value that Yahoo shareholders are currently placing on the entire company, even after a nearly 6 percent jump in its STOCK price Wednesday to $35.65 a share.
Yahoo's business operations are not really worthless, of course. "Yahoo is still a profitable company," Kessler said. "It's worth a heck of a lot more than zero."
Indeed, analysts estimate that Yahoo's websites and apps could fetch $3 billion to $8 billion if they were sold.
So far, Mayer has been adamantly opposed to a sale, and Yahoo's directors have backed her alternative strategy of finding a way to unlock the value of the Alibaba and Yahoo Japan stakes and deliver that to Yahoo's shareholders.
Yahoo has proposed spinning off its Alibaba holdings and a service business that caters to small companies into a new company whose shares would be distributed to Yahoo's shareholders early next year.
While such transactions have historically been deemed tax-free, the Internal Revenue Service has said it is re-examining the practice and declined to preapprove the Yahoo transaction.
Last month, Starboard said that there was too much risk that the deal would trigger a capital-gains tax bill, which could run to $10 billion or more. Some Wall Street analysts, including Kessler, said they agree with the fund's analysis and want the board to consider selling Yahoo's core business instead.
While the board has yet to decide whether it will seek a buyer, a host of companies are expected to be interested should Yahoo directors choose that path.
What would draw buyers, analysts and investors say, is primarily the company's huge Internet audience and the billions of ad dollars they still draw. Potential buyers could wring more MONEY by laying off a significant portion of Yahoo's 12,500 employees and selling the rights to some of Yahoo's patents.
Whether anyone could do a better job than Mayer of turning around the declining business remains an open question. But Yahoo's recent experiments have largely failed.
In 2014, for example, it introduced DIGITAL MAGAZINES, which the company hoped to turn into vibrant websites filled with lavishly illustrated articles and splashy, relevant ads that ran beside them. But many of the magazines have failed to deliver on that promise. On Wednesday, Yahoo's parenting magazine was showing ads from a clickbait video site called Smmirk and a mortgage comparison site called Fetcharate, while its food and beauty magazines showed automobile ads.
And while Yahoo introduced more than a dozen original series at an elaborate presentation at Lincoln Center in New York in April, many of those shows stirred little interest among advertisers. In October, the company announced it would take a $42 million write-off related to its video series.
That April presentation which featured the model Naomi Campbell and the actress Michelle Rodriguez, who rode a motorcycle on stage underscores the broader problem for Yahoo: At a time when much of the advertising industry is focusing on technology and data to reach evermore specific groups of consumers across the web, Yahoo has instead INVESTED huge sums of money in content and talent geared to the mass market.
"It becomes vanilla in a land of not 32, but 5,032 flavors," said Rob Norman, the chief digital officer of WPP's GroupM, the world's biggest buyer of online advertising. "What Yahoo tried to do both with magazines and video was to be old media in the Internet age, and I suspect that that wasn't the answer."
The result, advertisers say, is that Yahoo has gone out of fashion. And the money is moving away. Yahoo is predicted to take in about $3.4 billion in digital ad revenue this year, or only about 2 percent of the global digital ad market, down from 2.4 percent in 2014, according to eMarketer.
Overall, other companies offer brands more opportunities to engage with consumers, Ashafa said, particularly because they allow advertisers access to more data and technology.
Yahoo, she said, is still playing catch-up. "I don't think their products are top-notch, from an advertising perspective."
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