Is time running out for Marissa Mayer?

January 29, 2014, 5:59 AM UTC
Mayer speaking to investors and press during the company’s earnings call.

FORTUNE — After a string of ugly one-night stands, Wall Street found love with Yahoo (YHOO) CEO Marissa Mayer. The pair had a sweet honeymoon period: Yahoo’s share price has more than doubled during her first 18 months as CEO.

But with the company’s latest lackluster earnings report Tuesday, following the very expensive firing of key hire Henrique de Castro — a “regrettable conclusion and something we tried to avoid,” Mayer said — it seems the honeymoon is over.

The company announced $1.27 billion in revenue for the fourth quarter, down 6% from the same time last year. Net earnings per share for the quarter were $0.33, a 40% increase over last year. For the full fiscal year, Yahoo earned $4.68 billion in revenue, down 6% from the previous year. Net earnings per share for the year were $3.28, up 40% over 2012.

The price of the company’s shares dropped 6% in after-hours trading.

MORE: Henrique de Castro out as Yahoo COO

The techochamber has been predicting a Yahoo backlash for six months. (“Honeymoon’s over,” wrote analyst Youssef Squali of Cantor Fitzgerald.) The criticisms are valid. Sure, Mayer’s acquisition spree of failed startups brought new talent to Yahoo, and the company’s reputation has improved. (It received 340,000 resumes in 2013, double that of 2012. Forty percent were engineers.) But they haven’t made a measurable impact to the company’s fortunes.

Yahoo’s major product releases have failed to impress: Flickr has been criticized for diminishing its only differentiator, its strong community, and Yahoo Mail users reacted with “furor” to its redesign. Meanwhile, Yahoo’s big push into mobile has not propelled any of its myriad apps into the Apple App Store’s top 50.

Marquee editorial hires such as television network anchor Katie Couric and former New York Times technology columnist David Pogue have raised the question of whether Mayer is playing to her strengths as a product-focused CEO. If Yahoo were to embrace being a media company, rather than a tech company, why fire interim CEO Ross Levinsohn, who was already strong in that area? Making matters worse, Mayer has reorganized the company’s editorial department to report to CMO Kathy Savitt, which is not likely to sit well with its journalists (one related departure: Yahoo editor-in-chief Jai Singh).

The most important and valid criticism is that Yahoo’s core business is shrinking, even as it remains competitive on audience. In 2013, Yahoo increased its traffic so much that it erased two consecutive years of decline, Mayer said. Yet revenue shrank by 6%. (For the sake of comparison, Facebook (FB) Wednesday is expected to announce quarterly revenue growth of 50%.) Yahoo continues to lose digital advertising market share to Google (GOOG) and Facebook.

Wall Street hasn’t seemed to care. Until recently, that is.

MORE: Marissa Mayer at CES: Will her vision kickstart Yahoo’s growth?

On an earnings call Tuesday, Mayer stressed that Yahoo’s turnaround will take years, and her focus on people and products has positioned the company for a “chain reaction” of traffic and revenue growth in 2014.

Unfortunately, Wall Street’s patience for turnaround CEOs has shrunk over the past decade. Typically a CEO gets eight quarters to execute a turnaround, down from 16 quarters in the ’90s. Mayer’s predecessor at Yahoo, Scott Thompson, came and went even faster than that. Before him, Carol Bartz lasted two years and nine months. Jerry Yang, a co-founder, lasted just 18 months.

Luckily, Mayer joined Yahoo just after the company sold half of its stake in the Chinese e-commerce giant Alibaba, giving Yahoo more than $7 billion in cash for stock buybacks and $1.1 billion acquisitions like Tumblr. This, alongside anticipation of an Alibaba IPO in 2014, has kept investors from losing faith in Yahoo thus far. It may not last much longer.