Jeff Minich is a former Yahoo and an ad-tech industry veteran who has held product management and marketing roles at Adobe, Optimine, and most recently AdRoll. He wrote this post in response to the recent assault on Yahoo and its CEO by hedge fund manager Eric Jackson.

Eric Jackson has had a lot to say about Marissa Mayer and Yahoo lately. He’s a smart guy, I read his column and think he’s generally an astute investor.

But when it comes to Marissa and Yahoo, his analysis feels very shortsighted and, well, misinformed. It’s particularly so when it comes to his assessment of Yahoo’s operating structure and the trajectory of its core business.

When I disagree with someone, I always like to put myself in their shoes to better understand where they’re coming from. So let’s look at things from Eric’s perspective.

The value of his Yahoo stake has more than doubled since Marissa took over two years ago ... but nothing, at least according to the most recent income statement, has changed with the core business of Yahoo. It’s still in decline.

He’s looking at a post-Alibaba-IPO scenario where much of the value of the Alibaba transaction has been extracted for Yahoo shareholders ... and then what? If you’re truly pessimistic about the prospects of Yahoo’s core business, you’re probably worried the company is going to continue its slow decline into obscurity, unable to compete with Google and Facebook in a mobile-first world.

In that case, selling Yahoo to Alibaba makes perfect sense. Eric and other shareholders will get a one-time bump in value for their Yahoo stakes from the acquisition premium and savings from taxes that would have gone to Uncle Sam if Yahoo had sold its Alibaba shares. In this Alibaba-acquires-Yahoo scenario, Eric’s Ironfire Capital and other shareholders may get another 30-40% return in the short run while Yahoo gets absorbed into a much faster growing and successful global company. This is where I think Eric is shortsighted. I believe his long-term shareholder interests are better served by leaving the company in the hands of Marissa.

Before I explain why I’m optimistic, let me just say I’m not one of Marissa Mayer’s fanboys, not by any stretch. I worked at Yahoo through five CEOs — Carol Bartz, Tim Morse, Ross Levinshon, the disaster of Scott Thompson, and finally a year under Marissa.

I worked in the Ad Products Group and managed audience targeting for Yahoo’s premium display business. My product sat at the heart of monetization for Yahoo Display and was among the fastest growing and highest yielding (e.g. price per ad) components of the Yahoo Display business.

It was a proverbial “green shoot” in an otherwise blackened landscape for Yahoo Display. In spite of that track record, Marissa made decisions and leadership changes related to the premium display business that made it difficult for me to continue working there. So I left the company a year ago along with some of the top minds in display monetization, most of whom ended up in places like Facebook, LinkedIn, Twitter and other direct competitors to Yahoo.

Marissa should have embraced these bright minds and incorporated their expertise and knowledge into her new native ad and mobile vision. She chose not to and Yahoo display revenue, at least in the short term, suffered as a result.

What I didn’t get then, but understand now, is Marissa most likely made a conscious decision to put the legacy display business on the backburner to focus on building a new, more modern monetization platform capable of driving predictable and systematic long-term growth for Yahoo.

Could she have been more elegant and integrative in her approach? Probably. Is her new strategy working? Based on the last earnings report, I believe there are some compelling clues that it is. On the surface, I can see why investors like Eric might be discouraged, with revenues and price per ad still falling.

But look deeper into the Q2 report and there is one number that jumps off the page: Number of ads sold increased 24% year over year. You might think this is a non-event given that price-per-ad also declined 24% in the quarter (which actually results in the 7% year over year display revenue decline). But read between the lines and another surprising metric emerges from the Q2 report.

Native ads now make up 40% of all impressions sold on Yahoo, up 100% quarter over quarter. That’s huge. It means Marissa’s native ad play has a pulse. This is her big bet in display and, based on the current trajectory, native ads should become the majority of impressions sold on Yahoo! by the end of Q3.

In just over two years Marissa will have flipped the entire display business at Yahoo on its head ... from one almost wholly dependent on the whims of a few agencies and large advertisers to a much more robust business with a diversified customer base capable of spanning many thousands of large and small advertisers.

Price per ad should rebound as the native targeting capabilities improve and demand continues to rise. If price per ad improves, even just a bit, and the current growth rate in native ads continues, Yahoo will be a growth company again in 2015. Eric Jackson gave up on Marissa a quarter or two too soon. It’s a classic example of Wall Street short-term thinking. Now lets take a look at some of Eric’s other mis-givings about Marissa:

She Hired Henrique de Castro

I can’t really disagree that this was a mis-hire. Even Marissa admits that. To her credit, she course-corrected quickly at a very painful PR cost. It’s water under the bridge at this point.

She Increased Headcount

Eric uses Interactive Corp (IAC) as a benchmark to make the argument that Yahoo’s headcount is bloated. He neglects to mention that IAC is about one-third smaller than Yahoo by revenue.

Second, less than 5% of IAC revenue comes from Media. Original content creation is expensive and requires more headcount than the kind of services that drive most of IAC revenue (e.g. personals with match.com and search with ask.com). This is especially true when you are creating geo-specific content across diverse global markets.

But even assuming Eric is right about the IAC comparison, show me one example of a high-tech company that cut their way to growth? It just doesn’t work that way. Marissa needs to completely rebuild the car while still driving it. That means sustaining the legacy business while building completely new platforms for mobile, video, content, and native ads.

This is no small task, particularly given the fact that Yahoo is a huge global enterprise operating in dozens of different geographies and serving over 800 million active users. Marissa understands how damaging layoffs are to a company’s psyche.

I lived through several at Yahoo and it was extremely unpleasant and demoralizing. What Marissa has done instead is quietly filter out low-performers after each quarterly review period and then replaced those people with fresh new blood. My former colleagues tell me there is virtually no place for slackers at Yahoo anymore. That’s a good thing.

She Wasted $2 Billion on Acquisitions

Eric clearly hasn’t tried to recruit good engineers in the Silicon Valley lately. Hiring quality talent is difficult even when you’re a market leader and growing fast ... there’s just too much competition for engineering talent right now. A few months ago I saw a guy holding a cardboard sign on the street in San Francisco. He wasn’t begging for money, he was looking for engineers! That’s how bad it is.

By making many small acquisitions, Marissa has accelerated the process of rewriting Yahoo’s core engineering DNA. This is critical for the long-term success of the company. Eric’s view that the money was wasted neglects the fact that to be competitive Marissa needs an army of talented, hard-working engineers. Retrofitting a 12,000 person company with new layers of key talent takes time and money, but it’s the only way Yahoo will ever start building competitive products again.

Mobile Adoption Would Have Happened With Or Without Marissa

Do you remember the Yahoo mobile experience before Marissa? I do, and it was awful. You were better off accessing the desktop Yahoo site through a mobile web browser. There were about 50 mobile engineers at the company before Marissa arrived. Embarrassing but true. The reason there were so few was because the company was stuck in a backward looking bean-counter state where engineering investment followed current revenues rather than future growth opportunities.

The lack of investment was a total failure of previous leadership teams. Marissa has spent a good amount of time and effort cleaning up this mess and the results are starting to show with apps like the Yahoo News Digest (this one has actually become a daily habit for me), Weather, and Flickr. There is more work to do for Yahoo on the mobile front, but the re-invention of almost all of the company’s core products on mobile was a major undertaking, and one Marissa directly deserves credit for.

Eric has other complaints like the increase in stock-based compensation. This feels like he’s piling on just to make his point. He then goes on to warn that investors should be worried about Marissa’s stewardship of the upcoming Alibaba IPO cash haul. As a former Yahoo, and one who worked very close to its core monetization efforts, my take is that investors interested in the long-term potential of Marissa-fied Yahoo should be cautious of Eric Jackson’s line of thinking. He’s armchair quarter-backing and attacking her just ahead of what could be significant upside as a result of her retrofit of Yahoo’s core monetization platforms and content experiences. She deserves a few more quarters to let this reinvention take hold.