Carol Bartz Out As Yahoo’s CEO

Bartz says in a memo to employees that Yahoo Chairman Roy Bostock fired her over the phone. Tim Morse, Yahoo’s chief financial officer, is named interim chief executive.

On September 6, 2011, Carol Bartz was removed from her position at Yahoo! (via phone call), and CFO Tim Morse was named as Interim CEO of the company. Photo: Yahoo! Blog/Flickr

The situation around the departure is unclear, but Bartz has had a very rocky tenure in her 30 months at the company. It appears that Bartz was able to send an email to all Yahoo employees from her iPad informing them that her departure was not voluntary and that she was fired by the company’s Chairman.

“To all, I am very sad to tell you that I’ve just been fired over the phone by Yahoo’s Chairman of the Board. It has been my pleasure to work with all of you and I wish you only the best going forward. – Carol,” she wrote.

The news was first reported by All Things Digital, who also informed that Yahoo CFO Tim Morse has been named interim CEO. Investors welcomed news of Yahoo CEO Carol Bartz’s firing quite enthusiastically in after-hours trading on Tuesday evening, with shares of the company finishing the session up more than 6% to $13.72 per share.

Yahoo has formed an “Executive Leadership Council” to govern the struggling Internet company in the wake of Carol Bartz’s firing. To fill the void left by Bartz’s departure.

“The Board has also named key senior Yahoo! executives to a newly formed Executive Leadership Council tasked with supporting Morse in managing the Company’s day-to-day operations until a permanent chief executive is appointed, as well as supporting a comprehensive strategic review that the Board has initiated to position the Company for future growth,” the company said in a statement released on Tuesday evening.

Yahoo’s new executive council contains most of Yahoo’s key players. Mike Callahan (EVP, general counsel and secretary), Blake Irving (EVP & CPO), Ross Levinsohn (EVP, Americas), Rich Riley (SVP of the EMEA region) and Rose Tsou (SVP of the APAC region) will sit on the council.

Co-founders David Filo and Jerry Yang will not sit on the council, but will remain as Chief Yahoos. Yahoo is now conducting a thorough search for the company’s next CEO.

On January 13, 2009, Bartz was named CEO of Yahoo!, the internet services company which operates the third most-visited Web site in the world, succeeding co-founder Jerry Yang.

During a conference call with financial analysts later in January 2009, she announced her intention to make sure Yahoo! got “some friggin’ breathing room” so the company could “kick some butt.” Rob Hof of Business Week was skeptical that Bartz or anyone else could save the company: “… it’s not yet clear if Bartz can turn Yahoo around no matter how good she may be.”

In May 2009, Reuters reported that she had already “worked through an impressive checklist” at her new company, “upending the organizational structure, replacing executives and cutting costs, including 675 jobs, or 5 percent of the workforce.”

With a new round of job layoffs and the removal of a number of Yahoo! sites, “anxiety within the ranks has been exacerbated by what some say is a growing sense of secrecy”, for which Bartz has a notable reputation: “The informal flow of information once common within the company has come to a halt.”

Bartz was also quoted to have said that she would “drop-kick to fucking Mars” employees who leak to the press. Oreskovic quoted a fearful anonymous insider: “We are all sort of wanting to believe in her because we really want to see Yahoo! turned around, but it still doesn’t make it any less scary when you don’t hear about what’s coming up. Everything is on a need-to-know basis.”

At her one year mark at Yahoo in January 2010, Bartz gave herself a “B-” grade for the job done in 2009: “It was a little tougher internally than I think I had anticipated. I did move fast, but this is a big job.” Others in the media, however, rated her job higher given the challenges she had to manage.

While Bartz has streamlined certain areas and made some strong management hires, her performance has been decidedly bumpy and mostly downhill.

The share price has settled in at about $12.50 (just about where it was when Bartz took over), Yahoo’s recent financial results have been weak, its key advertising business is struggling, its attrition rate among engineers and others is startlingly high and its product innovation cycle seems stopped up.

Add to that: Weak relationships with key Asian partners, a pricey but failed marketing effort and a proclivity for embarrassing verbal gaffes by Bartz.

Still, given that Yahoo’s Internet traffic, top media sites and brand remain huge, the going-sideways situation has again caused some investors — including powerful private equity firms and other monied investors — to pull out their spreadsheets about a variety of scenarios related to Yahoo. [via Mashable and Huff Post]

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