Marissa Mayer still trying to return Yahoo 'to greatness'

In the three years since she took over as chief executive officer of Yahoo, Marissa Mayer has hired more engineers, worked to revive flagging sales and coped with major management departures as part of her turnaround plan.

But other things were top of mind for shareholders at Yahoo's annual meeting on Wednesday -- including formatting features for the company's email service. One shareholder asked specifically about the underlining feature in Yahoo mail, while others asked about updates to Yahoo Finance.

Investors largely stayed away from bigger-picture issues, like the company's sales declines and Mayer's ability to keep talent. Last quarter, Yahoo missed both profit and revenue estimates by Wall Street analysts. Sales from Yahoo's search advertising business have dipped as well.

"We're working very hard to take Yahoo, a very iconic company, and return it to greatness," said Mayer, who was joined on stage by Yahoo CFO Ken Goldman and general counsel Ron Bell. "We've worked hard to build ourselves a future."

Mayer, 40, has been busy trying to remake Yahoo for the mobile era. Today, more people surf the Web and do searches from their smartphones and tablets instead of desktop and notebook computers. In response, Mayer has refreshed the company's mobile properties, from Yahoo Weather to Finance to Sports.

But she still hasn't convinced enough consumers to make Yahoo a daily destination, especially on smartphones. In April, eight of the top 10 smartphone apps in the United States were owned by either Google or Facebook. Yahoo's apps didn't crack the top 15, according to ComScore.

Reporters weren't invited to attend Wednesday's meeting, which ran a little longer than an hour. It was held in Santa Clara, California -- about 5 miles east of the company's headquarters in Sunnyvale -- and live-streamed over the Internet. That left it to shareholders to press Yahoo's CEO on her plans as to what's next.

One investor asked about Yahoo's spinoff of its shares in the Chinese e-commerce giant Alibaba. Yahoo, which made a $1 billion investment in Alibaba in 2005, is doing a spinoff to avoid a large tax bill from a stock sale. When Alibaba went public last year, Yahoo sold a block of shares for about $7 billion, leaving it with a tax bill of more than $2 billion, according to The New York Times. The paper noted in May that "Yahoo's remaining stakes in Alibaba and Yahoo Japan together represent most of the market value of Yahoo, making it difficult for investors to evaluate Yahoo's core business, such as it is."

Yahoo's tax plan, though, has come into jeopardy as the IRS considers rule changes for spinoffs. Mayer told shareholders today that the company is "working hard" to carry out its proposal.

Wall Street largely shrugged off the shareholders meeting. As of this writing, Yahoo's stock is at $40.93, up less than 1 percent from yesterday's close.

Mayer has been able to resuscitate Yahoo's stock -- it's up more than 150 percent from when she became CEO in July 2012 -- but much of that was thanks to the company's stake in Alibaba. After Alibaba went public last September in the biggest IPO in history at $25 billion, it's been up to Mayer to prove that Yahoo's core products and advertising business can stand on their own.

Shareholders -- at least those who didn't ask questions at the meeting -- have been pushing back at Mayer. In September, activist investor group Starboard urged her to consider a merger with AOL. (Since then, AOL was bought by Verizon for $4.4 billion.) The group also took her to task on what it considered unnecessary spending. Under Mayer, the company has shelled out more than $2 billion for more than 50 companies.

There's also been a reshuffling among Yahoo's top brass. Earlier this year, Mayer promoted Simon Khalaf to senior vice president in charge of Yahoo's homepage and other products. Khalaf came to Yahoo when Mayer bought his mobile analytics firm, Flurry, last August. The startup is a key part of her effort to shore up ad sales from mobile apps. Other top executives, including the head of Americas, Ned Brody, and Mike Kerns, a senior executive who was previously in charge of Yahoo's homepage, have reportedly left.

For consumers, Mayer has made sure that Yahoo delivered major revamps of its core properties, including the photo storage site Flickr and Yahoo Weather. The company also introduced new apps, like News Digest, which summarizes the day's biggest news stories and packages them into two daily updates. Many of Yahoo's apps have won critical acclaim, with the Weather and News Digest apps winning Apple Design Awards in 2013 and 2014.

Mayer has also signed top talent to try to draw a bigger audience, including former CBS anchor Katie Couric, who will keep hosting segments like "Now I Get It" as part of a new "multiyear agreement" discussed today.

But that just might not be enough, a point that Mayer acknowledged at today's gathering.

"We are in the middle of a multiyear transition," she said. "We have a lot of work to do, but we've built ourselves a good foundation."