Humbug, Wall Street: Marissa Mayer is making the right moves

Wall Street does not like Yahoo CEO Marissa Mayer at the moment. But I'd bet on Mayer over Wall Street any day of the week.

Yahoo's stock has dropped 9 percent over the past week. The reason: the tech giant recently announced that it might not return to shareholders the billions it stands to earn from selling its stake in Alibaba. As a result, short-term investors started dropping Yahoo shares almost immediately.

I feel for Yahoo shareholders, especially the long-term ones. You've gone through one mediocre CEO who couldn't move the needle (Carol Bartz) and one CEO who flamed out in spectacular fashion (Scott Thompson). And now you have a new CEO asking you to be patient once again as she takes a shot at turning Yahoo around.

Still, I never understood why Yahoo promised to return any of the Alibaba cash in the first place. Yahoo owns 40 percent of the fast-growing Chinese company. Once it sells its stake, it will be at least $4 billion richer (if not more). If you include the cash that Yahoo already has on hand, it will have north of $5 billion in its war chest.

What could Yahoo do with $5 billion? Almost anything it wants. It could acquire Pinterest, Foursquare, and Quora without breaking a sweat. It could invest that money into new search, advertising, and mobile tech. It could use that cash to rebuild its media business or build something entirely new. Hell, it could even buy AOL if it wanted to. (Please don't.)

The only thing I know with certainty is this: staying the course would assure Yahoo's eventual destruction, while a series of strong acquisitions is the company's best chance for survival. Mayer knows this, and that's why she's made it clear that she's not bound by the promise of a previous CEO to return the Alibaba money to shareholders.

Mayer is not and should not be worried about short-term market fluctuations or whining investors. Her goal is to make sure there's a bigger and better Yahoo for her to command five years from now. Yahoo's board is giving its new CEO time to execute on a long-term plan -- I seriously doubt she would have taken the job without that assurance.

So far in my opinion, Mayer has made all the right decisions. She moved quickly to improve company morale, has started cleaning house, and is focusing the company on building great products once again. I think the critics are a bit short-sighted and don't realize that Mayer is a different (and better) kind of executive than Thompson or Bartz, though time will tell.

Mayer still has a long road ahead of her. Success will take a lot of great hires, a few billion in acquisitions, and the devil's luck for her to pull off the turnaround of the decade. I believe she's up to the task.