Cramer: This is why Yahoo has been decimated

Yahoo's fall from grace is due in large part to outside competition, CNBC's Jim Cramer said Wednesday.

"I look at what Apple's doing and their news flow, and I think, 'Geez, another iteration of the next guy doing better,'" Cramer said on "Squawk on the Street." "In this continual theme of invention and destruction, … this is a company that was decimated by better rivals."

Cramer made his remarks after Yahoo confirmed it was suspending the spinoff of its Alibaba stake amid tax concerns. Instead, the company will try to divest itself of the stake through a reverse spinoff.

"A separation from our Alibaba stake, via the reverse spin, will provide more transparency into the value of Yahoo's business," Yahoo CEO Marissa Mayer said in a release.

Mayer was appointed Yahoo's chief executive July 2012, and the stock has risen over 120 percent in her tenure.

Yahoo shares under Marissa MayerSource: FactSet

DISCLOSURE: Cramer's trust owned Apple's stock when this article was published, but not shares of Yahoo.