• CEO Marissa Mayer is under pressure as the value of Alibaba has declined
• The actual service she built may be worthwhile as a digital media company
• Will shareholders get that value or will it be frittered away?

Since becoming CEO of Yahoo (NASDAQ:YHOO) in July 2012, Marissa Mayer has become a lightning rod for critics, despite the fact that the Yahoo stock has doubled in value.

Source: Yahoo stock price data by amigobulls.com

That’s because the reason the Yahoo stock has ridden so high has nothing to do with Mayer’s performance and everything to do with a 40% stake in Alibaba (NYSE:BABA) acquired by co-founder Jerry Yang for $1 billion in 2005.  Mayer has whittled that down to 15% of the Chinese company.

What Marissa Mayer Built

Mayer spent the cash trying to build Yahoo, acquiring over 50 different companies, with names like Dapper, Astrid, and Rockmelt. The biggest was Tumblr, a blogging engine that cost $1.1 billion and has become the heart of its user interface. The best known was Summly, a news aggregator that cost $30 million and whose founder was then 17.

At Google (NASDAQ:GOOGL), where she spent the bulk of her career, Mayer was known for building great professional teams and products like Google Maps, Google Earth, and Google Street View, as well as failures like Google Health. Her eye for design was also credited with helping the Google look-and-feel.

But after more than three years at Yahoo its home page is still a jumble that reminds users of America Online in 2005. Yahoo remains a media company, an aggregator, the place where former CBS News anchor Katie Couric’s TV career went to die.

What is Yahoo Worth?

Still, there is a there, there. Yahoo will have about $4.8 billion in revenue during 2015. Over half usually makes it to the “gross profit” line -- $747 million out of $1.243 billion during the June quarter alone. But after general expenses and a research budget of $1.2 billion/year is taken out, the net income is negligible – a loss of 2 cents/share in June, a gain of 2 cents/share in March.

Then there is the Alibaba stake. Mayer tried to spin it out in a tax-free entity but the IRS questioned the idea this week, the company’s chief accounting officer resigned, and Yahoo still has the stake.

When the spin-off was first announced seven months ago the Alibaba stake was said to be worth over $39 billion. It’s now worth barely 60% of that, or $24.5 billion.

That leaves Yahoo itself with an equity value of about $5 billion, dirt cheap by tech standards. Given what has been spent to build that, however, the knives are out for Mayer. NYU Business School professor Scott Galloway said this week Yahoo should be “euthanized” and that Mayer is "the most overpaid CEO in history."

Is Yahoo stock a Buy?

So do you want to get into the middle of this mess? Based on its own fundamentals – net income of $3.9 billion on sales of $12 billion for the year ending in March at the current Yuan/Dollar exchange rate of 6.3 – Alibaba stock is full priced, but not overpriced. A decent September quarter, which its management has not promised, could send the stock skyrocketing. Based on its own results, Yahoo stock should be worth double its current valuation as a media company, and could be profitably sold to a Comcast (NASDAQ:CMCSA) or even a Verizon (NYSE:VZ) as a digital add-on.

The question is whether Mayer will be able to extract that value, whether Yahoo’s board will take the reins from her and do it, and whether you want to wait for that drama to play out.

Personally, I’d say it’s worth a tumble, if you have some mad money that isn’t doing anything.