Everyone loves to hate on Marissa Mayer. She's an easy target. A celebrity long before she arrived at Yahoo, she's a first-time CEO who has chosen to pose for fashion magazines, but has rarely opened up about Yahoo's strategy to the business press. She's a computer scientist by training and her engineer's personality is not always well received by Yahoo's Madison Avenue customers. And let's face it: she took on the hardest challenge in Silicon Valley.

Yahoo is among the most iconic companies to come out of the internet's first generation—and it's among the most troubled. Squeezed on all sides by Google and Facebook and an ever-evolving internet, Yahoo's legacy digital advertising business has long been on the decline, and the company had cycled through four CEOs in five years when Mayer left Google to take the job in July 2012.

Now that Yahoo has cashed in on the IPO of Alibaba—the Chinese internet behemoth it invested in years ago—and with its latest quarterly earnings release set for this week, many believe that Mayer's moment of reckoning is here as well. But the truth is that it's still far out on the horizon.

Mostly because of the Alibaba investment and an investment in Yahoo Japan, Yahoo is worth roughly $38 billion. There may be many ways still ahead to architect a soft landing for the company by taking it private or merging its core business with another, but there's only one way to return the beloved 20-year-old company to the splendor of its early days. Yahoo must once again become an idea factory on par with Google and Facebook, fueled by a disruptive hypergrowth business. That's the challenge Mayer signed on for. Nothing short of that will satisfy her.

>Yahoo must once again become an idea factory on par with Google and Facebook, fueled by a disruptive hypergrowth business.

At the moment, things aren't going all that well. More than two years after taking the job, Mayer has yet to restore the company's core business to growth. Advertisers and investors alike complain she hasn't articulated enough of a vision for how she plans to do it. Some activist investors are pushing for her to break Yahoo up, or to merge with competitor AOL. One outspoken investor recently published his personal vote of no confidence in her leadership abilities.

Much of the stock lift that has occurred on her watch can be attributed to Yahoo's massive holdings in Alibaba, which went public on September 19, bringing Yahoo an immediate windfall of $9.4 billion. Mayer has tried to jumpstart growth through an aggressive acquisition strategy, spending $1.3 billion on startups, but as activist investor Starboard Value contends, the results have yet to impact the bottom line.

The company's revenue, minus traffic costs, for the last quarter came in at $1.04 billion, a 3 percent drop from the same period a year earlier and lower than analysts had expected. It was the fourth drop in five quarters, and when Yahoo announces earnings later this week, they are likely to be lackluster once again.

But Mayer has ample support inside of Yahoo, and the company continues to make money–lots of money.

A Cozy Board of Directors

Her immediate job security comes primarily from her bosses—her board of directors. Mayer has done an excellent job of shoring up a board of supporters. A year into her tenure, she moved activist investor Dan Loeb and his appointees off Yahoo's board. She has added four board members in the past year, the most significant of which is company cofounder David Filo. A reclusive engineer, Filo represents the heart of the company and is beloved by Yahoo's rank and file.

He rarely speaks publicly, but in an interview in May, Filo told me that in Yahoo's early days: "We tended to hire people passionate about building new web services and products." Mayer, he explained, "has come in and reinvigorated that." Filo's support represents employees' support.

What's more, Yahoo continues to generate a lot of money. Yes, Yahoo's business has serious longterm structural problems. There's no arguing that the digital display ad business is in decline. Because ad space on the web is infinite and always growing, even if Yahoo sells more display ads over time, they'll be worth less so the company will still lose money on them.

But Mayer points to new growth opportunities in mobile, social, native advertising and video. On her last earnings call, she told investors that taken collectively, these businesses, which are still tiny, had seen revenues rise 90 percent in a year.

Strong Audience Growth

To realize these opportunities, of course, Yahoo will need to build new audiences, but there are signs that's happening as well. When Mayer arrived at Yahoo in July 2012, the company had 200 million monthly active users on mobile devices. Less than two years later, the company reported 450 million monthly active users. And users are spending more time on Yahoo's mobile properties. Mayer has said that time spent jumped 79 percent in the past year.

Mayer has taken criticism for her expensive and aggressive acquisition strategy, but it has reinvigorated the company's culture and enlarged its technical staff. Apart from Tumblr, for which Yahoo paid $1.1 billion, most of the companies she has purchased have been small startups acquired in order to take on engineering talent. The company will need this talent to transform itself.

Nobody is happy the turnaround is taking so long—especially not Mayer, who referred to the lag as a "short-term setback in our pursuit of growth" in her last earnings call. And there's a good chance she won't succeed in the end. After all, the challenge is twofold. She must return Yahoo to the type of growth expected of a public company, and then she must invent a new business with the potential to compete against the hypergrowth businesses fueling competitors Google, Facebook, Amazon and Apple.

But with a supportive board, a cash-generating business, and significant investments in Asia, she has enough time to let her strategy play out—and enough ambition to believe Yahoo can once again be great.