Liz Gannes and Kara Swisher

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With Billions Burning a Hole in Her Pocket, Here Are Some Companies Yahoo’s Mayer Might Be Eyeing (And Buying)

Now that she could have $4 billion more to play with from the proceeds of Yahoo’s sale of its Chinese assets, here’s a fun new Silicon Valley parlor game to enjoy: “What will Marissa Mayer buy?”

Her moves are more than just an exercise, though, as it’s becoming clear that the new Yahoo chief will be using acquisition as one of the key tools to bring talent into the forlorn Silicon Valley Internet giant and, presumably, foment both innovation and growth.

And there’s nothing like a big splashy acquisition from a new flashy CEO to get people inside and outside of Yahoo thinking the company is cool again.

Mayer is someone who knows from buying, having been involved in many Google acquisition negotiations over the years, including those that worked (Zagat) and those that didn’t take (Yelp and Foursquare).

But now the buck truly stops — and starts — with her.

Previously, Mayer had about $2 billion in Yahoo cash to use, some of which is tied up abroad and cannot be repatriated for tax reasons. While that’s certainly not chump change, it is minuscule in comparison to Microsoft, Apple, Google and even Facebook, all of whom would be bidding rivals in a number of cases, and most of whom — sorry, Mark Zuckerberg — have much stronger stock to also use.

That’s probably why Mayer is looking to add to her war chest. According to a Yahoo filing today, she is conducting a review of a variety of plans for Yahoo and, as part of it, might allocate money from its partial sale of a stake in China’s Alibaba that had been promised as a shareholder dividend or stock buyback, to other purposes.

Translation: Mayer is going on a buying spree.

That’s clear, according to numerous sources, who note that she has been making the rounds all over Silicon Valley and elsewhere, asking about talent, promising entrepreneurs and, of course, good acquisition targets.

“She is really surveying the scene with a lot of energy,” said one person of many she has visited of late. “It clear she wants to put a flag in the ground that she has arrived, and buying something of note will definitely do that more than the less-exciting job of fixing its ad platform, or the horrible prospect of laying off a lot of people.”

But while venture capitalists with struggling companies might cheer and make Mayer their BFF over her possible shopping spree, not everyone thinks this acquisition focus is such a dandy idea, given all that Mayer needs to fix at Yahoo already, and the concern that she might pay too much.

Noted a fantastic analysis from Bernstein Research after the Alibaba cash news:

“Perhaps we are too unimaginative, but given the challenges above and the nature of the competition it faces, from much larger and well-resourced businesses such as Google or Facebook, we have a hard time seeing how today’s Yahoo! could acquire a significant (emerging) Internet or media property, or multiple mid-size businesses, and create value. We see the downside risk of destroying value by overpaying and/or by hampering a rapidly growing but still relatively immature business with the burdens brought about by integration with underperforming Yahoo! as much higher than the upside potential.”

It’s doubtful that Mayer will listen to that — one exec who has heard her noted that “she seems intent on making a big move.”

Advertising tech companies have been high on her list initially, as Mayer has appeared to be considering doubling down on the arena at Yahoo to buck up its suffering assets. Her interest has turned to PubMatic, Mediaocean and Turn, said sources.

And, most recently, several insiders said she has been evaluating Criteo, a retargeting company that is led by former Yahoo exec Greg Coleman.

While some kind of ad tech move seems obvious and soon, there are also some other more consumer-centric product companies Mayer could be mulling, too, said numerous sources.

Here’s a rundown:

Foursquare: Mayer had previously tried to buy Foursquare before it took its last round of funding, when she led local efforts at Google. That makes sense, since it’s in her sweet spot of local and social.

The New York-based company was last valued at $600 million, and is in the midst of trying to prove it’s a real business. But that hasn’t happened yet.

That’s why this name keeps coming up, especially from people who were at Google with Mayer and know her intense interest in the company, as well as its clever CEO and co-founder Dennis Crowley.

Zynga: Some public market companies come at a discount these days, compared to the private ones that are still trading more on promise than revenue. Not so the stock-shocked Zynga, which is a product company, and highly metrics-driven, as Mayer famously is, too.

As its relationship with Facebook bears less fruit, Zynga could benefit from a new platform and audience, which Yahoo has. Zynga would have to come at a premium over its $2.3 billion market cap — although investors clearly aren’t that hopeful about its prospects, considering the company has $1.6 billion in cash.

But would Zynga CEO Mark Pincus — who is friendly with Mayer — agree to be a loyal lieutenant to her? (Admittedly, we’d pay to see that management pairing.)

Flipboard: The elegant Flipboard social reader app was a leap forward in app product design when it first launched a couple years ago. But the app’s growth hasn’t paced with the iPad, despite being a signature demo for the device.

And its formerly extremely friendly relationship with Twitter — where CEO Mike McCue was on the board until recently — is cooling, as Twitter looks to establish a more consistent content display experience across different platforms. Still, McCue has done the long build thing before, having run Tellme for eight years before selling to Microsoft. But while McCue may have the personal stability to be patient, his ability to hire going forward isn’t going to be great until Flipboard figures out Plan B.

Yelp: Yelp is another relatively cheap public consumer Internet company, and another that Mayer had gotten to know in her past Google life. It currently has a market cap of $1.62 billion.

While the Google-Yelp deal went awry, and the local reviews player once turned down a bid from former Yahoo CEO Carol Bartz, Yelp might fare better under Mayer, who likes crowd-sourced recommendation sites (see: Zagat).

Path: Path has been an acquisition target for most of its life, given its slow start and its team’s top pedigree. Thus, its name keeps coming up among many looking at what Yahoo needs.

That’s probably because Mayer knows CEO and co-founder Dave Morin well — she also invested in his wife Brit’s online media company — and could consider him a good choice for a top product exec at Yahoo.

But it seems a long shot — those familiar with Morin’s thinking say that he wants to remain independent. More to the point, this was a company that thought it was too good for Google’s bid, so going to Yahoo seems even less likely.

Pinterest: The digital scrapbook phenom is perhaps the hottest — and priciest — name mentioned, and such an acquisition, if Mayer could swing it, would send shock waves through the tech ecosystem.

But, while it is in Yahoo’s wheelhouse of discovery, Pinterest is incredibly young and also revenue-free. That’s an issue for Mayer all over the start-up world, since she now has more pressure to choose buys that are accretive.

(Let it be said: Yahoo is not the wealthy wonderland of Google, where Mayer grew up, and where money grows like kudzu in its organic gardens.)

Still, the Yahoo board is giving her a clearly long runway, so might also not mind a few buys that break the bank and Yahoo’s margins, even if shareholders would.

One major issue with Pinterest: Its quirky co-founder and CEO Ben Silbermann does as he pleases, and we would guess it would not please him to sell right now.

But how about some cheaper options? Those in the know suggested a few good mobile start-ups that aren’t so big, high-profile or expensive:

Bump: This app originally gained fame for the physical exchange of contact info between two phones, but then got more general-purpose. More recently, it has been focused on helping people easily share photos from their phones to their computer. Sounds like a good fit for Flickr. It has raised about $20 million in funding.

Pulse: This smooth newsreading app has an energetic young team and about $10 million in funding. It just released a snazzy Web version.

Foodspotting: The visual restaurant app focuses on helping people find delicious dishes. It’s mobile-first, and it also has the angle of being all-positive, with people only recommending things they like. It has less than $5 million in funding.

While this is a very Silicon Valley-focused list, as these things tend to be, there are many more companies out there in the world that might fit the bill — as well as individuals that the tireless Mayer could woo one by one.

So let the parlor games begin.

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I think the NSA has a job to do and we need the NSA. But as (physicist) Robert Oppenheimer said, “When you see something that is technically sweet, you go ahead and do it and argue about what to do about it only after you’ve had your technical success. That is the way it was with the atomic bomb.”

— Phil Zimmerman, PGP inventor and Silent Circle co-founder, in an interview with Om Malik