Marissa Mayer made big news last year when Yahoo Inc. snatched her out of Google’s clutches and made her its new CEO. Since then, Mayer has made strides in redesigning the company to be more modern, attractive, and user friendly. She gave the company a new logo, inserted some perks similar to those offered by Google, and has even managed to boost the company’s stock by a whopping 130 percent since taking over. However, it may not be enough to keep the Internet giant alive.

Ad Revenue Dropping

Yahoo’s core business focuses on ad revenue generated from search and display (banner and in video) ads. In fact, more than 75 percent of Yahoo’s revenue comes from this type of advertisement. However, both sides of Yahoo’s advertising business are struggling. The sales for each of these ads has dropped consistently each quarter this year, and Yahoo’s revenue has been flat for three years.

Why Is Yahoo! Inc. (NASDAQ:YHOO) Skyrocketing?

According to analysts, Yahoo is shooting up in value because of the massive stake it owns in Alibaba, which is China’s e-commerce giant. Alibaba is currently preparing to go public, which could prove to be extremely profitable for Yahoo. The company recently reported that the Asian e-marketer recorded a 61 percent increase in second quarter sales on a year over year basis, while its net income rose by 145 percent.

Victor Anthony of Topeka Capital Markets said, “I would say right now, the (Yahoo stock value) is 75 percent Asian assets, 25 percent Marissa Mayer.”

S&P Capital IQ analyst Scott Kessler seconds Anthony’s opinion, saying, “(Excitement around Mayer) is the number two driver, but I don’t think it’s close to the (importance of ) those perceptions around Alibaba.”

Mayer Front & Center

Since she came to Yahoo, Mayer has made headlines time after time, including setting her own maternity leave from the company when her baby was born last year. Just a few short years ago, Yahoo was nothing but a hulk of an outdated Internet company that was about to be swallowed up in the 21st century, and now Mayer has made it a frontline company.

Investor sentiment has become charged with enthusiasm as the stock has risen steadily since Mayer’s ascension to power. This rise in share price has given her the leeway she needs to search for a solution to truly save the company from its own demise.

Yahoo! Inc. (NASDAQ:YHOO) is currently trading at $36.62 per share.

Disclosure: Author represents that he has no position in any stocks mentioned in this article at the time this article was submitted.