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Wednesday, 7 September 2011

Yahoo fires chief executive Carol Bartz

Image representing Yahoo! as depicted in Crunc...

Yahoo CEO Carol Bartz has told staff in an email she was fired over the phone by the chairman of the board

in New York  

Carol Bartz
Carol Bartz has been fired as CEO of Yahoo. Photograph: HO/AFP/Getty Images
Carol Bartz, Yahoo's chief executive, was fired late on Tuesday ending a rocky tenure in which she tried and failed to revitalise the online giant.

In a statement the company announced Bartz had been "removed" from her post and would be replaced by chief financial officer Timothy Morse "effective immediately" on an interim basis as the firm began the search for a new, permanent CEO.

In an e-mail sent to employees from her iPad and titled "Goodbye," Bartz wrote: "I am very sad to tell you that I've just been fired over the phone by Yahoo's chairman of the board." She wrote, "It has been my pleasure to work with all of you and I wish you only the best going forward."

The combative chief executive had been under pressure to turnaround Yahoo from the day she was appointed. Yahoo remains one of the biggest destinations on the internet but has lost gound with advertisers and audience to Google, Facebook and services like Twitter.

According to research firm eMarketer Facebook is set to overtake Yahoo this year to collect the biggest slice of online display advertising dollars in the US.

Bartz joined Yahoo in January 2009, replacing co-founder Jerry Yang who had returned to the helm of the company in an ill-fated bid to turn its fortunes around. When Bartz joined the firm its shares were trading for around $12. After news of her departure broke, the shares jumped more than 6% in after-hours trade to $13.72, from a close of $12.91 on the Nasdaq. In January 2000, near the end of the dot-com bubble, Yahoo's shares traded at more than $125 a piece.

Bartz had also fallen out of favour with Wall Street investors, unhappy with her turnaround strategy and her handling of the firm's strained relatonship with China's Alibaba Group, in which it holds a 40% stake.

In June Yahoo chairman Roy Bostock gave his public support to Bartz at the company's annual general meeting. "This board is very supportive of Carol and this management team," Bostock said in his opening remarks. "We are confident that Yahoo is headed in the right direction."

Bartz, had previously been chairman of software firm Autodesk. She arrived with a reputation as a tough talker and reinforced it early in her tenure by telling Michael Arrington, founder of the influential Techcrunch website to "f*** off" during a staged interview at an industry event.

Her management style came under fire after the company's apparent mishandling of its relationship with Alibaba. In May when it was revealed that Alibaba had handed Alipay - one of Alibaba's crown jewels - to a company controlled by Alibaba founder Jack Ma, apparently without Yahoo's knowledge. Alibaba said Yahoo was fully aware of the transaction and the two sides openly bickered about the deal.

Yahoo is conducting a strategic review of the company's options, including possible divestment of its Asian holdings. It cautioned that no decisions had yet been made.

Bostock said: "On behalf of the entire Board, I want to thank Carol for her service to Yahoo! during a critical time of transition in the Company's history, and against a very challenging macro-economic backdrop. I would also like to express the Board's appreciation to Tim and thank him for accepting this important role. We have great confidence in his abilities and in those of the other executives who have been named to the Executive Leadership Council."

The company also said its directors named five other senior Yahoo executives to an executive leadership council that is intended to help Morse, a former chief financial officer at Altera, a semiconductor makers, and at General Electric Plastics, manage the company.

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Yahoo boss Carol Bartz is fired by US internet company

Carol Bartz was brought on board to change the fortunes of the search and internet company
Carol Bartz  

Yahoo's chief executive Carol Bartz has been fired by the internet company after two-and-a-half years in the top job. 

The company said in a statement that Ms Bartz was removed by the board of directors, effective immediately.

Tim Morse, Yahoo's chief financial officer, will take over from Ms Bartz.

Yahoo has been struggling to increase its market share as it faces increased competition from rivals such as Google and Facebook.

Yahoo shares jumped more than 6% in after-hours trading after news of the firing broke, indicating they would trade higher when Wall Street opens for business on Wednesday. Yahoo's stock price was up at $13.72, an increase of 81 cents.

Mr Morse will serve as interim chief executive and the board of directors will look for a new CEO, the company said.

No turnaround

Ms Bartz was hired to run Yahoo in early 2009, taking over from co-founder Jerry Yang.

She made significant changes to the management team and cut jobs to save on costs. She also shifted the focus of the traditionally search-oriented firm towards more personalized content.

“Start Quote

I am very sad to tell you that I've just been fired over the phone by Yahoo's chairman of the board”
Carol Bartz Former CEO, Yahoo
However, Larry Magid, a technology analyst at C-net, said the company has not seen enough of a turn-around under Ms Bartz's leadership.

"She hasn't done anything to change the company's fortunes, and they are still anxious to find a leader who can move them up," he said.

Critics also claim that Yahoo has failed to make significant strides in two of the most lucrative segments of the market; search and social networking.

"Facebook is way ahead, and now even Google is way ahead of Yahoo in social networking," C-net's Mr Magid added.

"In terms of the potential for long-term revenue it's just not there. They've got some great sites, great information resources, news, stocks, sports, but that's not what bringing in the money."

Phone firing

The news first broke on the Wall Street Journal's All Things D website, which quoted an email from Ms Bartz to Yahoo staff. The email has since been reported by other news agencies including Bloomberg and Reuters.

"I am very sad to tell you that I've just been fired over the phone by Yahoo's chairman of the board," Ms Bartz said in the email to staff.

"It has been my pleasure to work with all of you and I wish you only the best going forward."

As news of the sacking spread across the internet, Yahoo released its own press statement in which it confirmed it was undergoing a "leadership reorganisation" and that Ms Bartz would be leaving the company.

Roy Bostock, chairman of Yahoo's board, said in the statement: "On behalf of the entire board, I want to thank Carol for her service to Yahoo during a critical time of transition in the company's history, and against a very challenging macro-economic backdrop."

He added that he saw "enormous growth opportunities" for the firm.

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