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How Yahoo CEO Marissa Mayer set up her potential downfall

Mayer reportedly reneged on a secret deal with an activist investor to cut costs.


Yahoo CEO Marissa Mayer at a CES keynote in 2014.

Ethan Miller, Getty Images

Don't trust Yahoo CEO Marissa Mayer to keep her word.

That's the takeaway from an exhaustive account by The Wall Street Journal of Mayer's secret promise to activist investor Jeffrey Smith, CEO of Starboard Value LP, to cut costs.

Instead of cutting costs, Mayer sunk more money into turning around the business, including paying $20 million for the rights to stream a National Football League game and $160 million for shopping site Polyvore. The spending spree spurred Smith to take action, resulting in his firm taking nearly half of the company's board seats and forcing an auction of its core Internet access.

That sale could effectively end Mayer's run as CEO and her doomed quest to make Yahoo relevant again.

Yahoo and Starboard representatives weren't immediately available for comment.