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First on CNBC: CNBC Transcript: Yahoo CEO Marissa Mayer Speaks with CNBC’s “Squawk on the Street” Today

WHEN: Today, Wednesday, February 3rd

WHERE: CNBC's "Squawk on the Street"

Following is the unofficial transcript of a FIRST ON CNBC interview with Yahoo CEO Marissa Mayer on CNBC's "Squawk on the Street" (M-F, 9AM-11AM ET) today, Wednesday, February 3rd. Following are links to the interview on CNBC.com: http://video.cnbc.com/gallery/?video=3000491212, http://video.cnbc.com/gallery/?video=3000491216, http://video.cnbc.com/gallery/?video=3000491218 and http://video.cnbc.com/gallery/?video=3000491220.

All references must be sourced to CNBC.

DAVID FABER: LET'S MOVE ON NOW TO YAHOO THIS MORNING IF WE CAN. YAHOO ANNOUNCING LAST NIGHT IT WOULD EXPLORE STRATEGIC ALTERNATIVES. THAT IS PART OF A RESTRUCTURING PLAN AS WELL THAT WILL CUT ABOUT 15% OF ITS WORK FORCE. ALL OF THAT, OF COURSE, WHILE THE COMPANY IS STILL PROCEEDING WITH A PLAN TO SPINOFF ITS CORE BUSINESS AND THE STRATEGIC ALTERNATIVES , OF COURSE, ALSO INCLUDE LOOKING AT POTENTIAL BUYERS FOR THAT CORE BUSINESS. MARISSA MAYER IS THE CEO OF YAHOO. SHE JOINS US NOW TO EXPLAIN ALL OF THAT AND DISCUSS THE QUARTER AS WELL. SHE JOINS US FROM THE COMPANY'S HEADQUARTERS IN SUNNYVALE. NICE TO HAVE YOU VERY EARLY THIS MORNING, MS. MAYER. THANKS FOR JOINING US.

MARISSA MAYER: GOOD MORNING. THANKS FOR HAVING ME.

FABER: YOU KNOW, I THINK PEOPLE COULD BE FORGIVEN PERHAPS FOR BEING A BIT CONFUSED GIVEN ALL THE THINGS I JUST MENTIONED. YOU'RE PURSUING A STRATEGIC PLAN THAT IS SOMEWHAT DIFFERENT FROM THE ONE IN THE PAST, YOU'RE PROCEEDING AHEAD WITH THE SPINOFF OF YOUR CORE BUSINESS. AT THE SAME TIME, YOU ARE ALSO CONSIDERING STRATEGIC ALTERNATIVES. SO GIVEN ALL OF THAT, WHERE IS YOUR – AND WHAT IS YOUR FOCUS?

MAYER: WELL, MY FOCUS IS ON THE STRATEGIC PLAN THAT WE LAID OUT YESTERDAY. HOW DO WE MAKE YAHOO THE VERY BEST VERSION OF ITSELF THAT WE CAN? AND THAT'S BEING FOCUSED ON DISCOVERY, BEING THE DIGITAL INFORMATION GUIDE THAT WE'VE ALWAYS BEEN AND REALLY THINKING THROUGH HOW CAN WE INFORM, CONNECT AND ENTERTAIN OUR USERS. AND SO, IT'S MUCH OF THE SAME FOCUS WE'VE HAD IN THE PAST, BUT EVEN MORE CONCENTRATED INTO PARTICULAR AREAS. MAIL, SEARCH, TUMBLR AS GLOBAL PLATFORMS, NEWS, SPORTS, FINANCE, AND LIFESTYLE AS VERTICALS THAT WE WILL OFFER IN PARTICULAR GEOGRAPHIC AREAS. AND MAKING YAHOO THE VERY BEST VERSION OF ITSELF WE CAN FOR OUR USERS, FOR OUR ADVERTISERS IS REALLY WHAT IS GOING TO SERVE OUR SHAREHOLDERS BEST. AND THAT IS HOW THAT DOVETAILS WITH BOTH OUR WORK ON THE REVERSE SPIN AS WELL AS EXPLORING STRATEGIC ALTERNATIVES.

FABER: YOU OBVIOUSLY HAVE BEEN TRYING TO DO THAT SINCE YOU FIRST TOOK OVER AS THE CEO IN, I THINK IT WAS THE SUMMER OF 2012. AND SO I WOULD LOVE TO UNDERSTAND WHAT IS DIFFERENT NOW. YOU WERE QUOTED IN "THE WALL STREET JOURNAL," I THINK YOU SPOKE TO THEM LAST NIGHT, AS SAYING, "I PROBABLY NOW UNDERSTAND MORE OF WHAT THE NECESSARY STEPS AND INGREDIENTS ARE AND HAVE A BIT MORE REALISM IN TERMS OF HOW QUICKLY THEY CAN BE AT COMPANIES AS LARGE AS YAHOO." WHAT DOES THAT MEAN?

MAYER: WELL, WHAT IT MEANS IS, WHEN WE LOOK AT – THERE'S SOME VERY BASIC PREREQUISITES WE NEEDED TO GET IN PLACE WHEN I FIRST GOT HERE. WE WEREN'T IN MOBILE AT ALL. TODAY WE HAVE 600 MILLION MOBILE MONTHLY USERS. AND WE HAVE A BILLION DOLLAR MOBILE ADVERTISING BUSINESS, ONE OF THE LARGEST IN THE WORLD. AND SO WE HAVE GOTTEN SOME OF THOSE PRECURSORS IN PLACE. I NOW UNDERSTAND HOW LONG IT'S TAKEN US TO DO THAT AND DO IT REALLY WELL, AND ALSO HOW WE CAN MOVE FORWARD AND REALLY PROPEL OURSELVES FROM HERE. AND SO WE FEEL GOOD ABOUT OUR PLAN, WE ARE CONFIDENT IN THAT PLAN, BUT I DO THINK IT MAKES SENSE FOR US TO HAVE A MORE REASONED PERSPECTIVE IN TERMS OF HOW QUICKLY WE CAN REALLY MOVE IT.

FABER: SO THAT IS SOMETHING YOU CAME TO UNDERSTAND –

MAYER: AND WE'RE NOW COMING FROM A POSITION OF STRENGTH, WHICH IS A BETTER PLACE TO BE OPERATING FROM.

FABER: WHY IS IT A POSITION OF STRENGTH YOU'RE COMING FROM?

MAYER: BECAUSE OF WHAT WE'VE ACHIEVED IN MOBILE AND RELATIVITY QUICKLY. AS I SAID, 600 MILLION MONTHLY MOBILE USERS, MORE THAN $1 BILLION IN MOBILE ADVERTISING. WE HAVE OUR NEW FORMS OF ADVERTISING THAT WE HAVE BEEN FOCUSED ON – MOBILE, VIDEO, NATIVE AND SOCIAL THAT TOTALLED $1.6 BILLION OF GAP REVENUE LAST YEAR. AND THOSE ARE REALLY FORWARD LEANING FORMS OF ADVERTISING THAT DIDN'T EXIST IN THE COMPANY THREE OR FOUR YEARS AGO. WHEN I ARRIVED AT YAHOO, WE HAD ALL OF THE LINES OF BUSINESS BASICALLY IN DECLINE IN TERMS OF REVENUE. AND THE ONLY WAY TO EFFECTUATE A TURNAROUND IS TO START GETTING YOUR REVENUE GROWING AGAIN. SO WE EITHER NEEDED TO TURN THOSE BUSINESS LINES TO GROWTH OR ADD NEW BUSINESS LINES THAT COULD GROW REALLY QUICKLY AND BECOME SUBSTANTIAL ENOUGH TO MATTER TO OUR OVERALL $5 BILLION OF REVENUE IN A SHORT PERIOD OF TIME. AND WE DID THAT WELL. AND I WOULD COMPARE IT TO TECTONIC PLATE SHIFTS, WHERE THE PLATES SHIFT BENEATH YOUR FEET, WHICH IS REALLY THE COMPOSITION OF OUR REVENUE, BUT WE STAY AT ROUGHLY THE SAME ELEVATION. AND THAT'S THE STRATEGY WE'VE HAD ON OUR TURNAROUND, IS TO BASICALLY HOLD REVENUES FLAT, UNDERSTANDING THEY MIGHT BE FLAT TO DOWN, BUT REALLY WORK ON ESTABLISHING NEW LINES OF BUSINESS THAT COULD CARRY THE COMPANY FORWARD. AND I THINK WE'VE DONE THAT WELL.

FABER: ONE THING THAT IS ALSO THOUGH BEEN GOING DOWN, MS. MAYER, IS EBITDA. I MEAN, I LOOK BACK AT YOUR THIRD QUARTER 2014 EARNINGS CALL, BECAUSE AT THAT POINT, MANAGEMENT SAID EBITDA LEVELS ARE AT A LOW POINT AND YOU EXPECT TO SEE IMPROVEMENTS WITH REVENUE GROWTH IN '15. THAT DIDN'T TAKE PLACE. THE LAST 12 MONTHS OF EBITDA WHEN YOU SAID THAT WAS 1.4 BILLION. '14 WAS 1.4 BILLION. '15, 951 MILLION. AND NOW WE'RE TALKING ABOUT EXPECTED EBITDA IN 2016 OF 700 TO 800 MILLION. YOU KNOW, INVESTORS I'VE SPOKEN TO SAY THAT DOESN'T GIVE ME CONFIDENCE THAT MANAGEMENT IS GOING TO PURSUE A PLAN HERE THAT IS GOING TO RETURN SOME GROWTH.

MAYER: AND WE HAD PLANNED IN 2015 TO SEE REVENUE GROW, AND WE DID NOT. AND THAT'S ONE OF THE THINGS THAT HURT EBITDA. AND SO, AS WE LOOKED INTO 2016 IN OUR STRATEGIC PLAN, WE FELT IT WAS REALLY VERY IMPORTANT FOR US TO ACKNOWLEDGE THAT REVENUE WOULD BE DOWN IN 2016, LARGELY DRIVEN BY, FOR EXAMPLE, THE EXPIRATION OF OUR TIPLOW WITH ALIBABA, AS WELL AS SOME OTHER LEGACY HEADWINDS. EBITDA WILL ALSO BE DOWN LARGELY DRIVEN BY THE FACT THAT REVENUE IS DOWN. BUT WE ACTUALLY WANTED TO SPEND TIME IMPROVING THE PROFITABILITY OF OUR BUSINESS. AND WE HAVE A PLAN THAT HAS OUR MARGIN IMPROVING OVER THE COURSE OF THE YEAR.

FABER: EXCEPT, I MEAN, MY UNDERSTANDING IS THOUGH, MAVENS, WHICH OF COURSE HAS BEEN A KEY PART OF YOUR GROWTH ORIENTATION, IF YOU WILL, OVER THE LAST COUPLE OF YEARS, THE GROWTH PART OF YAHOO, IT GREW 44% YEAR OVER YEAR IN '15, BUT YOU ARE SEEING A SIGNIFICANT DECELERATION IN THAT IN '16, ARE YOU NOT? IN PART BECAUSE OF MOBILE SEARCH?

MAYER: THAT'S RIGHT. WHAT WE'RE SEEING AT SOME POINT WHEN THERE BECOMES A REALLY LARGE NUMBER, YOU'RE GOING TO SEE SOME TRAILING OFF IN TERMS OF PERCENTAGES OF GROWTH. THAT SAID, WE DO SEE GROWTH THERE THAT WE'RE PROUD OF. WE'RE OBVIOUSLY GOING TO TRY AND GROW EVEN FASTER THAN THAT. BUT A LARGE PART OF OUR MOBILE REVENUE IS DRIVEN BY MOBILE SEARCH, AND OUR MOBILE SEARCH PRODUCT IS MORE MATURE THAN SOME OF THE OTHER PRODUCTS THAT ARE IN THE MAVENS MIX.

FABER: WHY DO YOU FEEL THAT SHAREHOLDERS ARE GOING TO HAVE CONFIDENCE IN THIS NEW PLAN?

MAYER: WELL I THINK THAT WHEN I LOOK AT THE PLAN, WHAT I SEE IS A REALLY FOCUSED PRODUCT PORTFOLIO. AS I SAID, THREE CORE GLOBAL PLATFORMS – MAIL, SEARCH AND TUMBLR – AND FOUR VERTICALS – NEWS, FINANCE, SPORTS AND LIFESTYLE. AND ON THE ADVERTISING SIDE, IT REALLY COMES DOWN TO YAHOO GEMINI AND BRIGHT RULE. AND THAT'S THE MUCH MORE CONCENTRATED SET OF PRODUCTS THAT WE CAN WORK TO REALLY ACHIEVE EXCELLENCE IN. AND THEY ARE WELL POSITIONED, ESPECIALLY IN TERMS OF MOBILE. AND SO, WHEN I LOOK AT THE OVERALL PRODUCT SUITE, THAT IS WHAT DRIVES ENGAGEMENT AND ENGAGEMENT IS REALLY WHAT DRIVES OUR BUSINESS. AND SO, WE CAN BUILD EXCELLENT PRODUCTS, REALLY GET OUR ENGAGEMENT TO GROW AND CONTINUE TO GROW THE WAY THAT IT HAS OVER THE PAST FEW YEARS, I'M CONFIDENT THAT WE CAN ULTIMATELY GROW REVENUE AND WE CAN BALANCE OUR EXPENSES IN THE BUSINESS.

FABER: JIM CRAMER HAS A QUESTION FOR YOU. JIM?

JIM CRAMER: YES. MS. MAYER, I READ EVERYTHING THIS MORNING. I'VE READ EVERY BIT OF RESEARCH. AND I HAVE TO TELL YOU, HALF THE PEOPLE SAY, YOU KNOW WHAT? THIS COMPANY, IF YOU GET THE MAVENS GOING, IT CAN REALLY HAVE SOME LEVERAGE. I'M NOT SURE YET WHETHER THAT IS GOING TO HAPPEN. AND THEN HALF THE PEOPLE SAY THE CORE ASSETS ARE FOR SALE. JUST FOR SALE. AND THAT MAYBE YOU'RE RUNNING AN ACTIVE PROCESS. AND WHAT WOULD DETERMINE A QUALIFIED BID. I HAVE NEVER SEEN THE JOURNALISTS AND THE ANALYSTS MORE SPLIT. COULD YOU PLEASE CLARIFY. IS THERE A SALE OF CORE? IS THERE A BID THAT YOU WOULD TAKE? AND ARE YOU RUNNING A PROCESS WITH AN INVESTMENT BANKER THAT IS GOING TO PRODUCE A RESULT THAT MAY BE BILLIONS OF DOLLARS FOR SHAREHOLDERS?

MAYER: WELL, TO BE CLEAR, THE EXPLORATION OF STRATEGIC ALTERNATIVES IS SOMETHING THAT IS LED BY THE BOARD. AND I'M A MEMBER OF THE BOARD, BUT OBVIOUSLY, SOMETHING THAT WOULD BE LED BY THE INDEPENDENT DIRECTORS. BUT I WOULD SAY THAT OVERALL, WE VIEW THESE AS VERY COMPLEMENTARY. EVERYONE IS AWARE OF OUR LARGE STAKE IN ALIBABA. THE SEPARATION OF THAT ALIBABA STAKE IS REALLY THE MOST DIRECT PATH WE HAVE TO VALUE MAXIMUMIZATION. AND SO THERE'S A NUMBER OF WAYS THAT THAT COULD BE ACHIEVED. THE REVERSE SPIN IS ONE OF THEM. VARIOUS STRATEGIC ALTERNATIVES WOULD BE ANOTHER WAY OF ACHIEVING THAT. AND IT DOVETAILS WELL IN MY VIEW, WITH THE STRATEGIC PLAN AROUND MAVENS BECAUSE THE WAY THAT WE CAN REALLY MAXIMIZE THE WHOLE AND MAXIMIZE THE SUM OF THE PARTS IS TO ACHIEVE BOTH THE SEPARATION OF THE ALIBABA STAKE AS WELL AS MAXIMIZE THE POTENTIAL THAT WE SEE IN THE CORE ASSETS.

CRAMER: OK, LET ME JUST FOLLOW UP ON THAT BECAUSE I THINK IF YOU MENTIONED SUM OF THE PARTS – IF YOU LOOK AT YAHOO FINANCE, IF YOU LOOK AT YAHOO SPORTS, AND YOU HAD THOSE AS A COMPANY, THEY CLEARLY ARE WORTH MORE THAN ZERO. BUT WHEN YOU BACK OUT THE PARTS THAT YOU ARE TALKING ABOUT, YOU GET LESS THAN ZERO. THAT IS INCONCEIVABLE TO ME. CAN YOU MAYBE EXPLAIN THE DISCONNECT BETWEEN THOSE TWO DIVISIONS. I'M JUST PICKING ON THOSE TWO, NOT EVEN GOING MAVENS, AND HOW THEY COULD BE WORTH NOTHING TO THE MARKETPLACE WHEN A LOT OF COMPANIES INCLUDING A VERIZON, EVEN A MICROSOFT WOULD WANT THOSE DIVISIONS IN ORDER TO BE ABLE TO BULK UP THEIR ENTRIES IN THOSE CASES.

MAYER: WELL, I MEAN I CAN'T PRETEND TO UNDERSTAND SOME OF THE DIFFERENT MODELINGS THAT VARIOUS FOLKS DO IN TERMS OF DISCOUNTS, ETC. WE OBVIOUSLY DON'T THINK THAT THEY'RE WORTH ZERO. WE THINK THEY'RE REALLY VALUABLE PROPERTIES, AND OUR USERS AND ADVERTISERS THINK THAT AS WELL. AND SO, OUR GOAL IS TO SHOW THEIR VALUE TO THE MARKET AND BE RECOGNIZED FOR THAT VALUE.

FABER: WELL MS. MAYER, IS IT YOUR EXPECTATION PERHAPS THAT GIVEN WHAT YOU'RE AWARE OF THAT HAS BEEN INCOMING SO FAR IN TERMS OF INQUIRIES OF INTEREST IN THE CORE BUSINESS THAT WILL YOU FIND A POTENTIAL BUYER WHO IS WILLING TO GIVE YOU, OR PRESENT TO THE BOARD, A SIGNIFICANT PREMIUM TO PERHAPS WHAT YAHOO'S CORE BUSINESS IS WORTH?

MAYER: I CAN'T SPECULATE. BUT AS WE STATED YESTERDAY, WE WON'T BE COMMENTING ON THE EXPLORATION OF STRATEGIC ALTERNATIVES UNTIL AND UNLESS WE REACH AN OPTION THAT WE'VE AGREED ON. BUT I WOULD SAY ON THE WHOLE, OUR FOCUS HERE IS TO MAXIMIZE THE TREMENDOUS POTENTIAL THAT WE SEE AT YAHOO. A BILLION USERS A MONTH, 600 MILLION MOBILE MONTHLY ACTIVES, BUILDING THE BEST PRODUCT SUITE WE CAN WITH SOME REALLY TERRIFIC PEOPLE AND SOME REALLY TERRIFIC VERTICAL SPACES AND ASSETS OVERALL IN THE BUSINESS.

FABER: WELL, WE ARE OUT OF TIME I'M TOLD. BUT WE APPRECIATE YOU JOINING US THIS MORNING. MARISSA MAYER, THE CEO OF YAHOO, THANK YOU.

MAYER: THANKS.

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