Yahoo fires Bartz as CEO, names CFO to fill void

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Yahoo fires Bartz as CEO, names CFO to fill void

Post by ToddS on Tue Sep 06, 2011 10:10 pm

Yahoo fires Bartz as CEO, names CFO to fill void

APBy MICHAEL LIEDTKE - AP Technology Writer | AP – 21 mins ago

SAN FRANCISCO (AP) — Yahoo Inc. fired Carol Bartz as CEO Tuesday after more than 2½ years of financial lethargy that had convinced investors that she wouldn't be able to steer the Internet company to a long-promised turnaround.

To fill the void, Yahoo's board named Tim Morse, its chief financial officer, as interim CEO. Bartz lured Morse away from computer chip maker Altera Corp. two years ago to help her cuts costs. Yahoo, based in Sunnyvale, Calif., said it is looking for a permanent replacement.

The shake-up was initially reported by the All Things D technology blog.

Bartz's austerity campaign has helped boost Yahoo's earnings, but the company didn't increase its revenue under her leadership at a time when the Internet ad market has been growing.

Bartz's inability to snap Yahoo's financial funk, along with recent setbacks in an online search partnership with Microsoft Corp. and an investment in Chinese Internet giant Alibaba Group, proved to be her downfall.

Yahoo has now replaced three CEOs in a little over four years. During that time, Yahoo has been losing ground in the Internet ad race to online search leader Google Inc. and Facebook even though its website remains among the world's most popular. Her ouster comes with 16 months left on a four-year contract that she signed in January 2009.

Known for her no-nonsense leadership and sometimes gruff language, Bartz arrived at Yahoo as a respected Silicon Valley executive who had won praise for turning around business software maker Autodesk Inc. But she had no previous experience in Internet advertising, the main way that Yahoo makes money.

That void on her resume immediately raised questions whether she was qualified for the job, and those doubts only escalated as Yahoo's revenue continued to sag.

At first, Bartz blamed bad timing; she started the job during some of the bleakest months of the Great Recession. Later, she would say that she inherited such as mess from her two predecessors, Yahoo co-founder Jerry Yang and former movie studio boss Terry Semel, that it would take time to get Yahoo back on the right track.

At one point, she even compared her challenge to those that faced Steve Jobs when he returned to Apple Inc. as CEO in 1997.

Unlike Jobs, Bartz, 63, never was able to articulate a strategy to win over investors.

"She focused on plugging holes in the ship instead of turning it around," said Gartner Inc. analyst Ray Valdes.

The disappointing performance was reflected in Yahoo's stock price, which closed at $12.91. That's 81 cents, or 7 percent, higher than where Yahoo shares stood when Bartz was hired as CEO. During the same period, Google's stock price has risen by more than $200, or 66 percent.

Bartz never hit any of the price targets that the board set for her when she was hired, a shortfall that meant none of the 5 million stock options that she received upon signing her contract ever vested.

Investors seemed happy to see Bartz go. Yahoo shares gained 81 cents, or more than 6 percent, in extended trading late Tuesday.

Although Bartz's exit as CEO came suddenly, her departure isn't a shock. The pressure to replace her grew earlier this year after Bartz acknowledged Yahoo's search partnership with Microsoft wasn't' producing as much revenue as the companies anticipated. Then, in May, Yahoo stunned investors by disclosing that Alibaba had spun off an online payment service in a move that threatened to diminish the value of Yahoo's investment in the Chinese company.

Alipay in July agreed to a complex settlement that could eventually be worth more than $1 billion to Yahoo, but there were too many uncertainties in the deal to placate shareholders.

Yahoo Chairman Roy Bostock had steadfastly stood behind Bartz whenever she was attacked by investors or analysts. In a Tuesday statement, Bostock thanked Bartz for "her service to Yahoo during a critical time of transition in the company's history" without providing an explanation for why the board decided to replace her.

BGC partners analyst Colin Gillis said Yahoo's board "has got to look in the mirror here."

"Swapping the CEO without swapping the (board) chair doesn't solve your problem," he said. "The person that hired Carol to begin with deserves to share the culpability."

With its stock sagging and its management in limbo, Yahoo could be more vulnerable to a takeover attempt by a private equity group or another opportunistic bidder attracted to what remains one of the Internet's best-known brands. Microsoft offered to buy Yahoo for $47.5 billion, or $33 per share, in 2008 only to be rebuffed.

___

AP Technology Writers Rachel Metz in San Francisco and Ryan Nakashima in Los Angeles contributed to this story.

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Re: Yahoo fires Bartz as CEO, names CFO to fill void

Post by Shirley on Thu Sep 08, 2011 9:58 am

Bartz Could Get About $10 Million After Firing

By Brian Womack - Sep 8, 2011 8:50 AM CT

Carol Bartz, who was fired Sept. 6 as Yahoo! Inc.’s chief executive officer, stands to receive a payout in the range of $10 million after less than three years on the job.

Bartz, 63, would have received $10.4 million, including cash and equity, had she been fired at the end of last year, according to a April 29 filing by the company that estimated the payout. In addition, Bartz is still eligible for vesting stock options based on the shares reaching certain milestones in the future.

Yahoo fired Bartz, who took the helm in January 2009, after the company posted disappointing sales and struggled to compete with rivals Facebook Inc. and Google Inc. (GOOG) Yahoo will lose its spot as the top seller of display ads in the U.S. to Facebook this year, New York-based researcher EMarketer Inc. has predicted.

The company said in a filing yesterday that “no new compensatory or severance arrangements were entered into in connection with these leadership changes.”

Bartz is eligible for about $3 million based on her salary and bonus last year, according to the April 29 regulatory filing. Also, the company would award a pro-rated bonus based on her months on the job this year, according to the filing.

Yahoo, based in Sunnyvale, California, fell 6 cents to $13.55 at 9:49 a.m. New York time on the Nasdaq Stock Market. The shares had dropped 18 percent this year before today.

To contact the reporter on this story: Brian Womack in San Francisco at [You must be registered and logged in to see this link.]

To contact the editor responsible for this story: Tom Giles at [You must be registered and logged in to see this link.].

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