Yahoo's Mayer Yields to Activist Investors: Your Top Wednesday Headlines

1) Yahoo is handing over its $40 billion share of Alibaba to its shareholders. You can hear Starboard cheering from here: that is what the activist investor has been demanding for months and Marissa Mayer gave in, probably saving her job in the process. The how and the why of this complicated spinoff are explained in plain English here by Bloomberg View's Matt Levine. What we'll end up with is, on my right, $40 billion's worth of Alibaba plus as insignificant a part of Yahoo as possible while still fooling the IRS. On my left, Yahoo sans Alibaba. And who's excited about that?

Marissa Mayer just quieted the storm, but now there's a massive ocean to navigate and we've yet to be convinced that Yahoo is seaworthy. Mayer told The Wall Street Journal she decided to go ahead with the spinoff last August. Douglas MacMillan writes:

The process consumed almost her entire first two years at the company and required a small army of bankers and lawyers, she said."

Call me na?ve, but shouldn't the new CEO of a struggling company be consumed with building a fantastic product? (In fact that's exactly the strategy Mayer laid out when she was hired, according to the guy who recruited her, James Citrin, below.) We've heard the "Mobile, Video, Native Ads and Social" shtick ad nauseum; let's see it now, while the hounds are briefly looking away. Because Starboard will be back: it's asking for a merger with AOL, which Mayer is flatly refusing. Will that consume the next two years?

2) Apple is breaking records again. Its earnings crushed analysts' expectations and proved the company was right to bet on big screen iPhones and take a bit out of Samsung's niche. Fourth quarter profits reached $18 billion and iPhone sales jumped 46%.

3) American Airlines announced a $4.2 billion profit in 2014 and expects to save $5 billion in 2015 thanks to declining oil prices. You're not going to see any of that though. "We're going to continue operating American as though oil was still above $100 a barrel," said CEO Doug Parker. It isn't of course, so this conservative management means more profit at the end of the year and no fare discount for you and me. That's because demand, not cost, determines price, AA explains. That is, when oil trends are down. When they're up, rest assured you'll see a fuel surcharge. But you don't have to be happy about it.

4) The Obama Administration is proposing to open some US waters in the Atlantic to offshore drilling. At the same time, it wants to restrict future drilling off the northern coast of Alaska. That ensures no one is satisfied.

5) Hotels better not block their guests' personal Wifi hotspots, says the FCC, calling the practice a "disturbing trend." Marriott, Hilton and other hotel chains are petitioning the FCC for the right to block such devices. They'd rather sell you access to their own network – at eye-gouging prices.

6) We've been wondering for a while whether Bloomberg BusinessWeek creative director Rob Vargas is trolling us. Or whether he is the best thing to happen to graphic design and the media industry. The blue and pink redesign of bloomberg.com, which is finally readable, and its traumatizing 404 page, which surely will get them sued, answers that: he's both.

7) Thank you for some stellar comments on yesterday's post. On IBM's demise, Joseph Brunner writes: "As the 45 to 65-year-old CTO/CIO retires, entreprise IT as IBM sells it and knows it is going away. The young CTO/CIO under 30 wants flex billing, usage billing for software, services and hardware. ... IT is getting cheaper and easier. Be warned." Sanghamitra Mandal adds, "One just wonders why the companies get over-resourced first and then turn the downturn on employees. ... Keeping staff lean, at least 10-15% below the actual requirement, justifies two things – extra hours and compensating remuneration for (employees), and avoiding this kind of bloodbath." Keep 'em coming and thanks for reading.

Every morning, we share the top headlines professionals need to know about right now. Share with your network, read and discuss — and let us know what we missed in the comments below.