Is Yahoo up for sale? CEO Marissa Mayer fires 1,700 workers, closes five offices and 'explores strategic alternatives' as she fights for her job

Yahoo is laying off about 1,700 employees, closing five offices and shedding some of its excess baggage in a shake-up likely to determine whether CEO Marissa Mayer can save her own job.

The long-anticipated purge will fire 15 percent of Yahoo's workforce along with an assortment of services including Smart TV and online magazines.

Yahoo also said it was 'exploring strategic alternatives' in addition to the continued pursuit of the reverse spin-off of its Internet business, the strongest sign yet that Mayer may be willing to sell the struggling Internet business of Yahoo, which was a web pioneer in the 1990s but has since been eclipsed by Alphabet's Google and Facebook in the battle for online advertisers.

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Activist investor Starboard Value LP in a letter to Yahoo last month ramped up pressure on the company, taking aim at Mayer and her leadership team and raising the prospect of a proxy battle

Shares of Yahoo, which also reported fourth-quarter results, fell 1.4 percent in after-hours trading on Tuesday.

The company said it would simplify its product portfolio and that it had begun to explore divesting non-strategic assets.

'Yahoo is a far stronger, more modern company than the one I joined three years ago,' Mayer said. 

'Today, we're announcing a strategic plan that we strongly believe will enable us to accelerate Yahoo's transformation,' said Marissa Mayer, Yahoo's chief executive. 

'This is a strong plan calling for bold shifts in products and in resources. 

'We are extremely proud of the billion dollar plus business we have built in mobile, video, native, and social.'  

Products that are on the chopping block include Yahoo Games and Yahoo Smart TV. 

It will close five offices in Dubai, Mexico City, Buenos Aires, Madrid, and Milan.

'We plan to reduce our workforce by 15%,' Mayer told investors on a video call.

'Our workforce is 34% smaller than it was in 2012, and we've closed 22 offices.'

'Our vision for Yahoo isn't changing,' she claimed.

'We inform, connect and entertain,' saying the strategy is a 'three legged stool'.

Yahoo on Tuesday also reported a 15 percent fall in adjusted quarterly revenue as it struggles to keep its share of online search and display advertising in the face of tough competition from Facebook and Alphabet's Google.

Chief Executive Marissa Mayer, who joined Yahoo in 2012 from Google, has been trying to revive the Internet pioneer's core media and online advertising business by spending heavily to draw more users to its websites.

Mayer also hit out at reports the firm had spent $7m on a lavish Gatsby themed holiday party.

'Reports of a $7m goliday party are overestimated by a factor of three,' she said.

'Our holiday parties globally cost $150 per per head.'

Mayer proposed in December that Yahoo spin off its main business, which includes its search engine, digital advertising units and its email service, after Yahoo abandoned efforts to sell its stake in Chinese e-commerce giant Alibaba Group Holding Ltd. But the company had provided few details.

'Separating our Alibaba stake from our operating business continues to be a primary focus, and our most direct path to value maximization,' said Maynard Webb, Yahoo's chairman. 

'In addition to continuing work on the reverse spin, which we've discussed previously, we will engage on qualified strategic proposals.' 

Traffic acquisition costs (TAC), the amount Yahoo spends to attract users to its websites, rose to $271 million in the fourth quarter ended Dec. 31, from $74 million a year earlier.

Yahoo's revenue - after deducting fees paid to partner websites - fell to $1.00 billion from $1.18 billion.

THE NEW YAHOO 

For consumer products, Yahoo will consist of three global platforms: Search, Mail, and Tumblr, and four verticals: News, Sports, Finance and Lifestyle in growth markets like the U.S., Canada, U.K., Germany, Hong Kong, and Taiwan. 

For advertisers, Yahoo will be defined by two core offerings: Gemini and BrightRoll. Gemini combines search and native ads for superior results, while BrightRoll offers programmatic buying and selling tools for video, display and native advertising. 

Yahoo's new strategy: Mayer said Yahoo's strategy was 'like a three legged stool' with search, mail and tumblr - ans revealed it would focus on news, sport, finance and lifestyle.

The company reported a loss of $4.43 billion, or $4.70 per share, in the quarter, compared with a net income of $166.3 million, or 17 cents per share, a year earlier.

Excluding items, Yahoo earned 13 cents per share, in line with analysts' average expectations.

Up to Tuesday's close of $29.06, Yahoo's shares had fallen 35 percent in the past 12 months. 

Yahoo's revenue has been shrinking through most of Mayer's reign, even though she has spent more than $3 billion on acquisitions and introducing features designed to bring in more traffic and sell more advertising. 

Activist investor Starboard Value LP in a letter to Yahoo last month ramped up pressure on the company, taking aim at Mayer and her leadership team and raising the prospect of a proxy battle.

Mayer made the announcements via a webcast streamed on Yahoo's site

Yahoo has struggled to grow its Internet business, which includes selling search and display ads on its news and sports sites and email service, in the face of competition from Alphabet's Google unit and Facebook.

Mayer's turnaround efforts have had little tangible effect so far.

The company's revenue has fallen slightly since she took the helm in mid-2012, and Yahoo's share of U.S. web searches is essentially flat with three years ago, gaining no ground on market leader Google.

Yahoo's shares were down 1.2 percent in afternoon trading on Monday.

Up to Friday's close, the stock had lost about a third of its value in the past 12 months.

Yahoo has already killed off the video service it once hoped would give Amazon, Hulu and Netflix a run for their money.

Yahoo has killed off the video service it once hoped would give Amazon, Hulu and Netflix a run for their money. Yahoo Screen, which launched in 2011, was the high profile home for the sixth season of Community.

Yahoo Screen, which launched in 2011, was the high profile home for the sixth season of Community.

However, the firm confirmed the site has been 'transitioned' from the site.

The site now redirects to the Yahoo homepage. 

'At Yahoo, we're constantly reviewing and iterating on our products as we strive to create the best user experience,' a company spokeswoman said in a statement. 

'With that in mind, video content from Yahoo as well as our partners has been transitioned from Yahoo Screen to our digital magazine properties so users can discover complementary content in one place.'

Posh: Mayer sat on a white armchair posing for photos with her employees at The Great Gatsby-themed event (above)

According to Variety, the shows will now be distributed across Yahoo's digital magazines. Community, for example, will be available under Yahoo TV. 

The company's music programming, including full concerts streamed through a deal with Live Nation, will fall under music

The service was initially run by former CMO and head of media Kathy Savitt, and included a new season of canceled NBC comedy Community and two other half-hour series.

Savitt left Yahoo in September and one month later the Marissa Mayer-led company announced that it had taken a $42 million write down on the video division. CFO Ken Goldman said at the time that he 'couldn't see a way to make money over time' on originals such as Community.

The move comes amid major concerns over Yahoo's future. 

In the latest attack, struggling Yahoo CEO Marissa Mayer came under fire for a lavish holiday party amid speculation about the company's future and calls for her to resign from one shareholder.

At the Great Gatsby-themed holiday party Mayer threw in San Francisco she sat perched on a 'pure white arm chair' posing for photos with employees.

It was one example of allegedly excessive spending cited by hedge fund manager Eric Jackson submitted in a 99-page presentation to the board of the company detailing the millions Mayer has been spending as Yahoo continues to struggle over the past three years, losing more and more ground to Internet giants Google and Facebook. 

Jackson, the founder of SpringOwl Asset Management in New York City, also detailed the $450million Mayer has spent on free food for employees over the past four years as well as the $2million she spent giving away JawBone Up fitness bracelets to mark her one-year anniversary at the company - something Mayer has denied.

Marissa Mayer speaks during the International Consumer Electronics Show in Las Vegas.

Mayer, Jackson pointed out, is also on the board at JawBone.

An individual who attended the company's Gatsby party wrote about their experience for Vice's Motherboard, saying the party was held in a warehouse on a pier and filled with chandeliers, a Rolls Royce , and even 'swinging flapper aerialists pouring champagne towers.'

The guest said there was a massive selection of top-shelf booze and variety of food offerings for those in attendance.

There was also a gambling parlor inside the venue and guests were each given $500 of fake money to use at the tables with any winnings going to charity.

The customized tables all had 'The Roaring 20th Year End Party 2015' written on the felt tops to celebrate the party's theme.

The entertainment was provided by a burlesque troupe and a 'Canadian boy/girl cover band.' 

Employees posted photos to social media of the event, many that showed them posing with Mayer as she sat in her armchair. 

Mayer gave birth to twin girls just days after the party and is currently on a two-week maternity leave.

There may not be a job for her to return to however if Jackson has his way.

Over the top: 'Swinging flapper aerialists pouring champagne towers' were a highlight of the party according to a guest

Business Insider obtained Jackson's 99-page presentation, which reveals the millions being spent by Mayer on everything from parties and event sponsorships to travel.

He also claims that if Mayer makes it to five years at the company, which would be in nearly 2017, she will have made $365million.

She made $24.9million in 2013 and $42million the following year.

Mayer apparently spent $3million for Yahoo to sponsor the Met Ball earlier this year, which in turn secured her a spot on the elite hosting committee alongside Anna Wintour, Jennifer Lawrence, Wendi Murdoch, actress Gong Li and Chinese billionaire Silas Chou.

That money only got Yahoo three tickets to the event however, for Mayer and two executives.

Yahoo was also a sponsor of the Davos conference in Switzerland earlier this year, and Mayer and other executives flew over on private jets bringing the total estimated cost to as much as $2million.

Jackson also points out that it is costing approximately $9.3million to give all 22,000 Yahoo employees free iPhones.

The 2014 holiday party also came with a hefty price tag according to Jackson, who claims that a Wizard of Oz-themed photo with executives featuring Mayer as Dorothy cost $70,000.

Jackson then calls out Mayer for some of the startups she has acquired during her time at the company such as Polyvore.

Mayer spent $230million to purchase the site, which allows users to put together entire looks including clothing as well as accessories that they can then purchase.

Jackson says Polyvore  was 'widely seen as a failure' before Yahoo purchased it, and that its CEO Jess Lee had known Mayer for 10 years and used her as a 'mentor.'

He also compares the success of Instagram since it was purchased by Facebook for $1billion with the decline in Tumblr since it was purchased by Yahoo for $1.1billion.

'The day Yahoo bought Tumblr was virtually the day Tumblr started to plummet in the app store rankings,' write Jackson in his presentation. 

It is not just Mayer who Jackson wants to see go either, as he is calling for 9,000 employees to be let go as well, which is 75% of the company's workforce. 

Big bucks: Mayer apparently spent $3million for Yahoo to sponsor the Met Ball earlier this year, which in turn secured her a spot on the elite hosting committee alongside Anna Wintour (above)

He also wants to replace members of the board he feels do not have enough experience and buy back $10billion worth of Yahoo stock to increase the value.

This plan, and Yahoo's stake in Chinese giant Alibaba, could turn the company around believes Jackson. 

Jackson gave an interview with Business Insider in which he said of Yahoo; 'The patient is about to have a massive heart attack from obesity and has to be taken care of immediately.' 

He then added about his plan; 'We haven't gotten a response from the board or management yet but think a lot of the shareholders are pleased that there's another plan out there.'

As for how Mayer might respond to being terminated, Jackson said; 'I don't think anyone knows - even the people who work closest with her, wouldn't be able to answer that question. There are lots of people who can speculate.' 

Jackson said in an interview with CNBC on Monday that he believes former Yahoo executives Ross Levinsohn and Jacqueline Reses could be good replacements for Mayer.

He has been an outspoken critic of the company or months, saying back in October during an interview on CNBC that Mayer should be replaced at the company. 

The New York Times spoke to someone involved with the company however who said that people at Yahoo consider Jackson 'small-time' and claim he 'doesn't have his numbers right.'

Mayer would also make a sizable amount of money if she were let go, with her severance package of $25.8million if she is fired. CNN Money reports that if she loses her job because the company is sold her package would be valued at about $110million.