Three years after Yahoo! fended off a mammoth $45 billion purchase bid from Microsoft, the company has unceremoniously fired the CEO it put in place since that effort: Its board of directors yesterday informed Carol Bartz that her services were no longer needed.
Bartz was hired as CEO of Yahoo! in January 2009, succeeding founder Jerry Yang, the man who spearheaded Yahoo!'s efforts to fight off Microsoft. Widely considered a fiery turnaround expert thanks to her previous tenure at Autodesk, she vowed to save Yahoo! too, and give it "some friggin' breathing room."
Since then, Bartz appeared to disappear into the woodwork. So, too, did Yahoo!, despite still controlling one of the most-often-visited websites on Earth. Its advertising revenues have remained flat during Bartz's time there, despite an ironic high-profile deal with Microsoft and its aforementioned site popularity. So did its share price, which has lingered just north of $10 for all of the past two to three years.
(Indeed, one has to think that Yahoo! would turn back the clock on that Microsoft offer now, if it could. Microsoft's offer for the company represented a price of $33 per share. Just before Bartz's ouster, the company's shares were selling at about $12.)
Bartz did earn a few achievements at Yahoo! She was responsible for numerous employee layoffs and dramatically reshuffled the executive ranks, all while raking in over $1 million per year in salary, $18 million in stock, and a heady annual bonus of up to 400 percent of her salary. She was not coincidentally voted "most overpaid CEO" by Glass-Lewis in 2010.
Of course, much of the blame for Yahoo!'s ills falls on the shoulders of its inept cofounder, Jerry Yang, and its equally inept board of directors. Together, this clueless cabal instigated the backroom shenanigans that led to Bartz's ouster, even though there was no clear plan for succession. They informed her of the decision via phone.
"I am very sad to tell you that I've just been fired over the phone by Yahoo!'s Chairman of the Board," Bartz wrote in an email to employees. (Apparently, it also didn't occur to Yahoo! that it should shut down Bartz's email account in the wake of the firing.) "It has been my pleasure to work with all of you and I wish you only the best going forward."
Yahoo! says that its CFO, Tim Morse, will be interim CEO until a replacement can be found. A more likely outcome: Yahoo! simply divests itself of much of its holdings and ultimately breaks up into several much smaller companies, each of which will matter just as much as does Yahoo! today.
Indeed, the cry from investors this morning is that Yahoo! doesn't need a CEO; it needs to be sold. I couldn't agree more.
I wonder if AOL is looking for a partner.
