Dan Niles, chief investment officer of AlphaOne Capital Partners, knocked Yahoo CEO Marissa Mayer on Thursday, but went on to tell CNBC the Internet company's stock is still worth owning.
"Just because somebody is a good leader of a division inside one of the best companies in the world, which is Google, does not mean that it's going—they're going to be able to be a good CEO of Yahoo," said Niles on "Closing Bell," referring to Mayer, who was a longtime executive at Google before taking the helm at Yahoo in July 2012.
Earlier this month, Mayer faced criticism for her decision to fire Chief Operating Officer Henrique de Castro, a former Google colleague she brought to Yahoo only slightly more than a year earlier. Yahoo shares plummeted on the news.
Niles said he reacted by selling deep-in-the-money call options against his position in Yahoo as a hedge.
"We still think the stock is going to do pretty well despite Yahoo's best efforts to mess it up," said Niles, adding Yahoo continues to benefit from its fast-growing Alibaba and Yahoo Japan assets.
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Google to benefit from Lenovo deal
Lenovo Group has agreed to acquire Google's Motorola mobile-phone business for $2.9 billion, a transaction that Niles viewed as "a great deal" for the Internet search giant.
After all, Niles noted Motorola's revenues were down significantly in its most recent quarter, whereas Google's stand-alone revenues were up. In turns, he thinks the move to shed Motorola will only help boost Google's earnings per share by "a couple bucks."
Facebook searches for the 'holy grail'
Over the past year, Niles has been in and out of Facebook's stock, but he told CNBC he's adding to his position in the social network because it stands to benefit from "the next billion-dollar business"—online video advertising.
To Niles, online video ads will be "hugely profitable."
"You can't skip through a lot of these ads and that's what the advertisers want. They want you to watch this, and they can measure it and that's why, to some extent, this is a holy grail for advertising," said Niles, noting Facebook only recently started experimenting with video ads with brand marketers, so it will likely drive growth for the next 12-18 months.
—By CNBC's Drew Sandholm with Reuters. Follow him on Twitter @DrewSandholm.
