Trouble at Yahoo: The stock is falling and execs are bolting

Three years into Marissa Mayer's project to rebuild Yahoo, the wheels are starting to come off.

Never mind that the company's revenue remains stagnant and that it has not yet managed to create anything close to a hit product which would spark some buzz among consumers and investors. Or that Snapchat reportedly dumped Yahoo from its Discover service because it decided Yahoo was simply not relevant to its younger, "millennial" audience. Or that Yahoo's stock has fallen 25% since May.

The real problem facing Yahoo now is that its own team looks like it's giving up.

That became all too clear with Monday's news that Jackie Reses, one of Mayer's key lieutenants who joined the team early on, is leaving to join soon-to-IPO digital payments company Square.

Reses and some of the other recent departures are not long-suffering Yahoos who have finally decided to move on after years of CEO changes, company re-orgs and other hardships.

This is the core team handpicked by Mayer to lead the comeback effort. These are the people who bought in to the vision and who, it would appear, have now lost faith that Mayer will lead them to the promised land.

Last month, Chief Marketing Officer Kathy Savitt, another marquee Mayer hire, left Yahoo. Yahoo's SVP of marketing partnerships Lisa Licht and roughly a dozen other execs have also left in recent months according to a report in Recode.

Who's left?

Yahoo's management page still shows a 15-person strong senior leadership team (not including Reses, who is still listed). But there are a few big names that would really damage whatever credibility the company's comeback effort still has, if they were to leave. These include Jeff Bonforte, a Yahoo "boomerang" hire, who oversees the company's communications products and Adam Cahan, who spearheads Yahoo's video and emering products. And then of course, there is CFO Ken Goldman, who Mayer tapped early on to bring some Silicon Valley experience and gravitas to the turnaround effort.

Of course, with Yahoo moving forward with the planned spin-off of its 15 percent stake in Chinese e-commerce giant Alibaba, it may simply be that for much of the executive team it's Mission Accomplished time.

The IRS has refused to give its advanced blessing making the Alibaba spinoff a tax free transaction, as Yahoo and its shareholders want. But Yahoo has indicated that it will push forward with the plan regardless.

Yahoo's stake in Alibaba is the real reason that Yahoo's own stock has more than doubled since Mayer took the reins in July 2012.

Yahoo's shareholders would prefer a tax-free spinoff. But even if it's not entirely tax free, completing the spinoff would give Yahoo's management team a convenient opportunity to trumpet an achievement and to wash their hands of the rest of Yahoo.

Sun Trust analyst Robert Peck speculated in a note to investors that Yahoo could become an acquisition target or a private equity play after the Alibaba spinoff.

Yahoo's turnaround would of course still be a work in progress. But then, maybe it was never about that to begin with.

We've reached out to Yahoo and will udpate if we hear back.