All of Yahoo's glaring holes came to light on Tuesday, when it reported its first-quarter finances.
It wasn't pretty. Yahoo posted a big loss, and sales fell by double digits.
CEO Marissa Mayer has made little progress over the past four years in her attempt to turn around Yahoo's fortunes. Despite spending billions of dollars buying numerous companies, hiring A-list media personalities, and shifting the focus to high-growth areas like mobile and video, Yahoo's core Internet advertising business has continued to lose ground to Google (GOOGL) and Facebook (FB).
It's not exactly a great time for Yahoo to be putting its core Internet business up for sale.
Bids were due on Monday. Yahoo has stayed mum on its potential suitors, and Mayer has reportedly been reluctant to provide detailed information about Yahoo's business and finances to bidders.
Mayer defiantly denied those reports, saying that she and the board have made the sale process "a top priority." She said she fielded "hundreds of questions" on the telephone from some of the most "well-known, respected names in the industry."
Though she said Yahoo will not be providing updates as it continues its search for a buyer, she said the company is being aggressive in its pace to reach a deal.
Verizon (VZ), owner of Yahoo rival AOL, is expected to be the top bidder and the most likely company to eventually buy Yahoo.
Related: Yahoo makes it easier to give Mayer a giant payday
Yahoo's management believes that the company is woefully undervalued, and the best turnaround plan is a healthy dose of staying the course and patience.
Mayer has repeatedly said that Yahoo has just scratched the surface in its potential to grow. She believes Yahoo's struggling legacy desktop advertising business will soon be overtaken by its growing mobile, video, native advertising and social media businesses. In the first quarter, those businesses brought in 38% of Yahoo's overall sales.
Yahoo is also in the process of offloading its massive stakes in Chinese e-commerce giant Alibaba (BABA) and Yahoo Japan, which constitute virtually the entire value of Yahoo. Effectively, that means the stock market has valued Yahoo's core Internet business as worthless.
Even Yahoo's biggest detractors don't believe Yahoo is worth $0.
Shedding Yahoo's Asian holdings and giving the company's turnaround plan time to succeed may give Yahoo the boost it needs to compete for the future. But we'll likely never know.
Yahoo (YHOO) could be sold soon. If it's not, Mayer and Yahoo's entire board faces a revolt from activist shareholder Starboard Value, which has said it would push to remove Mayer and all the directors at Yahoo's shareholder meeting this spring.
Meanwhile, it's (bad) business as usual for Yahoo.
Profit
First quarter of 2015: $21 million
First quarter of 2016: -$99 million
Yahoo lost $99 million as its legacy search business declined 15% and the share of search sales that Yahoo pays to its partners increased by 44%.
Still, that loss looks pretty good compared to the $4.4 billion loss Yahoo posted in the fourth quarter of 2015.
Sales
First quarter of 2015: $1.2 billion
First quarter of 2016: $1.1 billion, down 11%
Yahoo has been spending a lot of money in an effort to accelerate the growth of its core businesses.
But that isn't happening overnight, and there are signs that Mayer's plan has some holes in it. Yahoo said its mobile, video, native ads and social grew by just 7% this quarter, far slower than last year's growth.
This quarter
Second quarter of 2016 revenue forecast: $1.05 billion to $1.09 billion
This quarter, Wall Street analysts had expected sales to come in at $1.1 billion, so Yahoo's forecast came in slightly below analysts' expectations.
