Yahoo fires its CEO - over the phone

The troubled tech giant has divested itself of CEO Carol Bartz. It hasn't exactly taken the tech world by surprise - but Bartz may just be its latest scapegoat...

by Emma Haslett
Last Updated: 08 May 2012

Carol Bartz, the CEO of troubled US tech giant Yahoo, has been given her marching orders by its board – and to add insult to injury, it apparently happened over the phone. ‘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 in an email to her employees (composed, naturally, on her iPad). Given her fraught relationship with investors, there are few in the industry who are surprised by the decision. But the question now is, is there anyone who can turn Yahoo around?


By way of a send-off, Yahoo’s share price rose by 5.7% to $13.65 (£8.53) in after-hours trading when the news broke. Again, that’s to be expected: while some of her employees objected to what the Times referred to as her ‘allegedly abrasive personality and robust language’, she didn’t exactly strike up a rapport with shareholders, either. Most recently, she came under fire over her handling of the company’s relationship with Chinese company Alibaba, which Yahoo owns a 40% stake of. In May, Yahoo alleged that Alibaba had given Alipay, seen as one of its best assets, to a company owned by its founder, Jack Ma, without telling Yahoo first. Alibaba hit back, saying Yahoo had been informed – and very public embarrassment ensued.


Nevertheless: as one of the most senior women on the international tech stage, Bartz is a loss to the industry. She was recruited in 2009 to replace Jerry Yang, who had received just as much criticism from shareholders, after he rejected a $47bn takeover offer from Microsoft (although we’d wager Microsoft is thanking its lucky stars about that now, given Yahoo’s value is currently hovering around the $16bn mark). In a statement, Yahoo’s board said Bartz had carried the business through ‘a critical time of transition in the company’s history, against a very challenging macro-economic backdrop’.


But even that statement goes some way to suggest that Bartz’s failure to turn Yahoo into another Google wasn’t necessarily her fault. Her first move when on taking the helm was to undertake some serious fat-trimming, cutting product lines and heavily simplifying its management structure. But even today, Yahoo isn’t really sure what it does, with fingers in advertising, content and search pies, among many, many others. Even its core product – advertising – is beginning to lag behind: according to research by eMarketer, Facebook is on track to collect more in online display advertising dollars in the US than Yahoo this year.


In fact, that’s where most of Yahoo’s problems lie: competing against bastions of innovation like Facebook, Google and Twitter. In that respect, some see Yahoo’s model as heavily outdated. So whether a new CEO can succeed where Bartz failed remains to be seen.

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