Yahoo CEO Carol Bartz Gets Longer Than Expected Labor Day Weekend

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Yahoo CEO Carol Bartz Fired
Carol Bartz, who still had over one year left on her contract with Yahoo, was fired via a telephone call on Tuesday. She was hired in January of 2009 to grow Yahoo’s revenues, manage Yahoo’s valuable Asian assets, and combat Google’s takeover of Yahoo’s market share. Since accepting the position of Yahoo CEO, Bartz has been faced with continual challenges and controversy.

During Carol Bartz’s time as CEO, Yahoo has continued to lose market share to Google and Facebook. In addition, Yahoo has not been able to produce acceptable advertising revenues for stakeholders. Although the lack of advertising revenues and continued loss of market share to competitors are unacceptable, the major reason for her dismissal is most likely the manner in which Bartz managed Yahoo’s stake in Alibaba Group.

In 2005, Yahoo purchased a 43% stake in the China-based Alibaba Group for $1 Billion. Earlier this year, Yahoo stock tumbled on the news that Alibaba Group had sold the highly profitable Chinese payment company Alipay without Yahoo’s knowledge. Carol Bartz and her management team further aggravated the Alipay situation by neglecting to inform Yahoo shareholders of the news until three weeks after they learned of the situation. Due to the combination of poor communication and lack of knowledge related to Yahoo’s most valuable asset (stake in Alibaba Group), the investment community described Carol Bartz and the entire Yahoo Management team as clueless.

Carol Bartz’s departure has led to renewed speculation that Yahoo is once again a likely takeover target. However, the combination of a $16 Billion market value, eight years remaining on the search partnership agreement, and a multitude of other problems will most likely discourage Microsoft from another hostile takeover attempt.

Yahoo CFO Tim Morse has been named the interim CEO while Yahoo is searching for a permanent replacement. Yahoo’s future now rests on the new CEO’s ability to increase revenues, manage the Alibaba Group situation, and stem the market share losses that are occurring.

[Sources Include: Business Insider & Bloomberg, Picture Credit: Andrew Mager]

David Angotti

David Angotti

After successfully founding and exiting an educational startup in 2009, I began helping companies with business development, search engine marketing (SEM), search engine optimization (SEO),... Read Full Bio
David Angotti
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  • Michael Murdock

    The problem with that happening is the CFO is responsible for working with the CEO and informing them of things that financially impact the company. It’s the CFO’s fault as well as the CEO’s that this mistake was made and it’s also the Boards as they would have been at least advised of something so there was a failure to communicate all many levels.

    If I were CEO of Yahoo, I’d also be Chairman of the Board and I’d have a major executive branch housecleaning to ensure things like this did not happen. I’d also shoot to triple the value of the stock within a year or sooner. Preferably sooner with some great strategic partnerships as well as liquidating some projects and products that are not serving the bottomline of the company, nor the customers.

    And I’d not prep it to sell, I would prep it to succeed at levels it once enjoyed, remember the days of YHOO trading at $325 a share? I do and those were some amazing times. They can be back again with the right person in charge. That would be me.