Yahoo CEO is fired amid 'dull' growth

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“I am very sadto tell you that I’ve just been fired over the phone by Yahoo’s Chairman of theBoard”. These were the last words from Carol Bartz, the 62-year-old former CEOof Yahoo. The email, sent on Tuesday, saw her sacked after a “lack of aturnaround for the business”.
1 Billion US dollars. Enough tobuy infinite Yahoo memberships, as free as they are. It seems that is all Yahoois renowned for now; many email accounts and abnormal bulletins on thehomepage. Yahoo had a revenue of $1 Billion last year, and was still describedas being “largely flat in recent years” by The Wall Street Journal. Carol Bartzwas therefore sacked on Tuesday (6/09/11) after two and a half years as CEO ofthe once market-leading company of the dot-com generation. So, why?
Stock increaseBartz had one year left on hercontract so the decision to dismiss her now seems to suggest change was neededimmediately. In fact, the day after her departure saw Yahoo’s stock close withan increase of 5.4% the next day. Optimism is on the rise again it seems,almost rather embarrassingly, as soon as Bartz was deemed unfit for her duties.Does it come has a surprise? If you look on Yahoo, or have followed itsexistence, you’d know that it hasn’t changed too much. From being the no.1search engine at the beginning of the last decade it has, in recent years, lostground to Google and been slightly damaged by the surge of Facebook. In fact,the number of visits onto the site from U.S viewers has dropped by 33% sinceCarol Bartz arrived.
However, Ms. Bartz must have somecredit. She overhauled the organisational structure to make it moredecentralised and challenged the efficiency of the business. Unfortunately, herresponse to a reporter back in 2010 seems rather ironic nowadays.

Reporter: Why isn’t Yahoo as hotas Facebook?

Bartz: Remind me, what’s theirrevenue?

Where now? Yahoo is to now focus on organicgrowth. Organic growth is growth which is achieved ‘naturally’, usually fromsales, and not from external sources such as mergers or acquisitions. It needsto think of innovative ways to regain its market position, with the stand-ininterim CEO Tim Morse given the go-ahead to steer the turn-around. Expect inthe very near future features from Yahoo to engage the late teens/young adultdemographic which Facebook has done so well to draw in. Hotmail might be anexample of such developments with its unlimited storage capacity andconnections with MSN messenger. Or maybe this really is the beginning of theend of Yahoo, with competition becoming increasingly competitive. It’s safe tosay, Yahoo’s dominance is now over and the expulsion of their CEO seems toindicate they feel the same way. This is a new beginning for Yahoo and newpossibilities for the market. Watch this space.
Glen GostlowContributor
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