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Yahoo: Blame It on Bartz

Written on
Oct 1, 2010 
Author
Gavin Dunaway  |
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Yahoo: Blame It on Bartz

yahoo_smallADOTAS – The sudden departure of three senior execs as well as a sinking stock price has the Yahoo board considering putting CEO Carol Bartz out to pasture.

Today the company confirmed that Hilary Schneider, EVP Americas; David Ko, SVP of audience, mobile and local in North America; Jimmy Pitaro, VP of media, are all leaving the company, with Schneider staying on for a transition period. While Yahoo has been experiencing a high amount of executive turnover lately, Schneider and Pitaro were handpicked early during Bartz’s tenure when reinvention was the top priority.

A source told SAI that Pitaro has scored a sweet job at Disney and “Yahoo is a mess.” His bailout was “long overdue.”

YHOO is trading around $14 on the NASDAQ, which is down $5 from this year’s peak in April. ThinkEquity Analyst Aaron Kessler did some math and determined that Wall Street values Yahoo’s core business at lass than nothing.

To avoid an out-in-out firing, sources whispering in the ear of All Things D’s Kara Swisher suggest Yahoo’s board will install a strong second in command who will take over as chief when Bartz’s contract expires in 18 months. But if they do toss her out, SAI has nominated Facebook’s Chris Cox to take over.

Running the CEO out of town with flaring torches and pitchforks can sometimes give investors a jolt of confidence — however, it can have the opposite effect, especially if the CEO was only brought in at the beginning of last year to shake things up.

Bartz’s critics say she’s got no vision — the tech media mocked the company’s three-year plan at Yahoo’s Product Runway, and I even called it the search for the mythical fountain of cool. When asked “What is Yahoo?” during the Q&A, Chief Product Officer Blake Irving gave a rambling reply best summed up by its first sentence: “Yahoo is a global series of Web experiences delivered across a variety of devices that gives people what they want.”

All Things D’s John Paczkowski called it “the world’s worst elevator pitch,” but truth be told, that sounds like a lot of the head-spinning language used in press releases that I have to translate into English. Irving was painfully trying to spice up the description of an Internet portal. (How does Google explain itself? I’d love to hear that elevator pitch.)

Supposedly Yahoo has serious branding issues and the biggest problem is at the top of the empire. Fortune’s JP Mangalindan writes “As with any CEO role, it’s not enough for Bartz to streamline her company, as she’s arguably done. She needs to innovate with a long-term strategy beyond bringing a company’s product line up to parity. But all evidence indicates Bartz doesn’t really have one.”

However, last year she told PCWorld consumers would view Yahoo as a “home on the Internet.” With the Facebook and Twitter integrations, customized Yahoo homepages have become an all-in-one access point, an easy-to-use dashboard linking to mail, news, social networking and more. The acquisition of Associated Content (which AOL had its eye on before starting up content engine Seed) simply added to Yahoo’s healthy supply of content — and content quality is in the eye of the browser. Yahoo has pretty much transformed itself into a better version of AOL.

In fact, SAI’s Henry Blodget can’t believe that AOL and Yahoo haven’t already merged, and suggest they make their way to the altar immediately. Then again, he also wants Google to buy Twitter — he might just have matrimony on the mind.

The tech media tends to treat Yahoo like its personal chew toy, possibly because it doesn’t have the sex appeal of Facebook or Google. For some reason many writing about the web still compare the company to Google — when Yahoo signed the search deal with Microsoft, it was effectively surrendering the battle to Big G.

While chatting with a Yahoo representative a few months ago, I casually said, “I’ll have to Google that…” realizing my faux pas a second too late. He only smiled and rhetorically asked, How do you compete when your rival has become synonymous with the action?

And the media doesn’t like Bartz personally, sometimes calling her outspoken, sometimes calling her vulgar. But that’s what happens when you do stuff like curse out TechCrunch’s Michael Arrington during a conference. In all fairness, if you watch the video, Arrington was asking for it. MC Siegler even wrote in his coverage, “It took him about 15 minutes, but Mike got her to tell him to ‘f— off.’”

At a conference the following week, several industry players quietly (and anonymously) voiced their support for Bartz: “Hell yeah, Carol!” “You don’t know how long I’ve been waiting for someone to tell Arrington that.”

Also, you have to consider that Bartz is a woman at the top of a company in what’s been primarily a boy’s game. One does ponder whether her tough talk would be viewed differently if she was a man. Then again I haven’t seen any video of male CEOs publicly berating tech reporters (though video of Facebook CEO Mark Zuckerberg’s sweatathon still makes me gag).

And investors? God, they’re a whiny bunch. I’ll never forget investors bawling when Apple CEO Steve Jobs briefly stepped down a few years ago because of health issues. “Yeah, we want you to get well, Steve,” they cried, “but you should have given us more warning. I mean, what are we going to do?”

While Facebook surpassed the company in total impressions, Yahoo is still far ahead of the pack in display revenue. Total ad revenue increased by 2% year-over-year in the second quarter. Bartz seems to be shaping up as a scapegoat for a slow turnaround — but in her defense, she was handed a pretty leaky boat during an economic hailstorm.

In a memo to staff confirming the executive departures, Bartz tried to get the Yahoo team to stay calm.

“We have a good plan in place,” Bartz wrote. “In fact, I’m more fired up than ever and can roll with the punches.”

More power to you.





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