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Yahoo's Mayer set to outline her plan as criticism mounts

Speaking at her company's investor conference call this week, Marissa Mayer will discuss her strategy for overcoming Yahoo's challenges.

Yahoo CEO Marissa Mayer needs to make a big acquisition to please some critics. James Martin/CNET

Yahoo CEO Marissa Mayer will defend herself and her strategy at a third-quarter investor conference call Tuesday, according to a new report.

After Yahoo announces its third-quarter results that day, Mayer will take to the company's earnings call to outline her plan for growth and announce that Yahoo is planning to make a major acquisition or two, the Wall Street Journal is reporting, citing people who claim to have knowledge of the chief executive's plans.

According to the Journal, Yahoo hasn't pinpointed a final acquisition target, but the company will use some of its proceeds from last month's blockbuster Alibaba IPO to fund the deal. Yahoo netted $5.8 billion in that IPO, but has already said it will give half back to shareholders.

Mayer has come under fire, with Wall Street analysts and activist investor Starboard Value questioning her decision-making. In an open letter to the Yahoo CEO in late September, Starboard, which owns a portion of the company, said it was not convinced that Yahoo's many smaller acquisitions actually benefited the company. The investor has also argued that Yahoo should explore a merger with AOL "to both fully seize the cost reduction opportunity and also to tax-efficiently monetize Yahoo's noncore equity holdings."

According to the Journal's sources, Mayer believes that the future for her company rests in its ability to make major acquisitions that would have immediate and meaningful impacts on its revenue and bottom line. Yahoo has reportedly been in talks with some private-equity firms to boost the cash needed to make a major acquisition, though it would fund most of the deal itself, according to those sources.

Mayer began her tenure at Yahoo to praise and high expectations that she could finally bring some stability to what had been a revolving door in the C-suite. However, revenue has slid four of the last five quarters and the company's profits have disappointed some of its larger investors, who had hoped for more out of Mayer's many smaller acquisitions over the last year.

Although Mayer has been loath to speak publicly about the discontent in her investor corps, she did issue a letter last month, saying that she has "great confidence in the strength of our business," adding that the company will focus on "products that will drive sustainable growth: search, communications, digital magazines and video. We continue to leverage our portfolio of world-class products, which include Yahoo Search, Mail, News, Sports, Flickr, Tumblr and advertising solutions among others."

Yahoo did not immediately respond to a request for comment.