Yahoo! Inc. (NASDAQ:YHOO) shareholders cannot complain about the almost 150% increase in the price of their shares since the summer 2012 arrival of CEO Marissa Mayer. Past performance is no guarantee of future results, however, and Yahoo’s last couple of quarterly earnings reports have been somewhat alarming in terms of revenue growth ex-Alibaba.

Yahoo mayer

Adjusted earnings for Yahoo! Inc. (NASDAQ:YHOO) were reported at $0.46 per share and revenues were down just over 1% to around $1.2 billion.

All about Alibaba

Paul Sweeney of Bloomberg points out that aside from Limited (HKG:1688), Yahoo’s revenue growth is actually declining. Alibaba continues to grow rapidly, with 51% revenue growth and an $801 million net profit in the third quarter.

Commenting on Yahoo! Inc. (NASDAQ:YHOO)’s stock performance, Sweeney says, “If you look at the stock, it’s almost a complete bet on the Alibaba IPO.”

He also commented that “Marissa Mayer is probably starting to feel some pressure here now that’s she’s a year and a half into her leadership of the company.”

Many analysts are projecting that Limited (HKG:1688)’s long-discussed IPO will happen in the third or fourth quarter of 2014.

Good “financial engineering” by Yahoo’s board

Sweeney also emphasizes that in reality the price per share of Yahoo! Inc. (NASDAQ:YHOO) is largely the result of good “financial engineering”, rather than a real positive turnaround in the balance sheet. He pointed out that it was really the BoD’s smart decision-making that was supporting the stock price. He highlighted the Yahoo BoD, including Dan Loeb and Mayer, wisely “monetized part of Alibaba asset, and returned funds to shareholders, making some good acquisitions…”

“Multi-Year Turnaround”

In the 4Q earnings conference call, CEO Mayer also specifically stated that the company was involved in a “multi-year turnaround effort”, and that description could not have been reassuring to Yahoo! Inc. (NASDAQ:YHOO) shareholders.

Investors were clearly not pleased with Yahoo! Inc. (NASDAQ:YHOO)’s 4Q earnings report, given the stock is trading down over 7% at around $35.60 at noon ET today.