Sunnyvale, California -- In a shocking turn of event at the popular Sunnyvale, Calif.-based internet portal Yahoo late yesterday evening, Yahoo's chief executive, Carol Bartz was summarily dismissed, ending a rocky two-year turbulent tenure at one of the world's most-visited internet sites in which she attempted to revitalize the online media company, amid continuing investor complaints about its sagging stock price, low growth and difficulty with Asian investments.
The Carol Bartz era at Yahoo has finally ended! Bartz, who was appointed as Yahoo chief executive in January 2009, is no longer in the job. In a concise e-mail to employees sent late on Tuesday, Bartz said that she had been ousted “over the phone” in a conversation with Roy Bostock, Yahoo chairman, and that she wished remaining employees luck.
Surprisingly, rumors in the tech circles were swirling that Yahoo's board was confidentially considering replacing Bartz had been circulating for months. Yahoo Chairman Roy Bostock refused to address the rumors at the company's annual shareholder meeting in June but did say the board “is very supportive of Carol and the management team.” A spokesperson was more obstinate, saying at the time, “Rumors suggesting there is or has been any sort of search for a replacement to Carol are categorically untrue.”
Yahoo said in a subsequent press release that the board has said that Chief Financial Officer, Tim Morse has been named as interim CEO, as it seeks a permanent replacement. The news was first reported by AllThingsD.
She departed with the same outspoken style she used while running the company. In an e-mail she sent to employees from her iPad, titled “Goodbye,” Bartz wrote: “I am very sad to tell you that I have just been fired over the phone by Yahoo's chairman of the board.”
She also wrote, “It has been my pleasure to work with all of you and I wish you only the best going forward.”
Apparently, Carol A. Bartz has been under intense pressure since she took the helm as CEO in early 2009 to turnaround Yahoo's fortunes. Bartz was informed of the board's decision while she was traveling to New York from Maine, according to a person familiar with the board’s action.
In fact, investors celebrated early word of the change, sending Yahoo shares up more than 6 per cent in after-hours trading from a closing price of $12.91. That is about the level they traded at when Bartz joined the company in January 2009 and well below the price offered in a takeover bid from Microsoft the year before.
“We have talented teams and tremendous resources behind them and intend to return the company to a path of robust growth and industry-leading innovation,” Bostock said. “We are devoted to exploring and evaluating possibilities and opportunities that will put Yahoo on a flight for growth and innovation and deliver value to shareholders.”
However, in a statement late afternoon, Bostock did not revealed the board's decision for removing Bartz, though he noted the “very challenging macro-economic backdrop” in which she led the company. And he, not surprisingly, was bullish on the company's prospects.
“The board envisages enormous growth opportunities on which Yahoo can capitalize, and our primary objective is to leverage the company's leadership and current business assets and platforms to execute against these opportunities,” Bostock said.
When Bartz took over the CEO role from co-founder Jerry Yang in January 2009, the company was struggling to become more competitive and profitable. Bartz has been under pressure from her first day in the job to turn the company around, and one of her initial tasks as CEO was a reorganization of Yahoo in an attempt to make the Internet pioneer faster, simpler, and more responsive to those who use its services.
But Yahoo has continued to founder under her leadership despite management shuffles, layoffs and the shedding of underperforming services, never regaining the ground it lost to Web leader Google, and in recent months the pressure from major investors intensified. She engineered a deal that turned over its search operations to Microsoft, but that has also failed to live up to expectations.
Bartz spent 14 years as Autodesk's CEO before becoming executive chairman in April 2006, was initially greeted warmly by Yahoo shareholders after the previous leadership failed to consummate an acquisition by Microsoft, which was willing to pay a large premium to bolster its search-engine competition with Google. Prior to Autodesk, she also worked at Sun Microsystems, 3M, and Digital Equipment Corp.
Timothy Morse, the company's chief financial officer, who joined Yahoo in June 2009, is an ex-General Electric executive who came to the company from chip-maker Altera, will now serve as the caretaker chief executive. Morse holds a bachelor's degree in finance and operations and strategic management from the Boston College Carroll School of Management.
For his part, Morse said in a statement that he intends to work with the board to “invest in the organization and continue to drive its ongoing growth plans.”
Furthermore, Yahoo also assigned an Executive Leadership Council that will assist Morse in managing day-to-day operations until a permanent chief executive is appointed. The group will also oversee “a comprehensive strategic review” to improve growth prospects. That group includes Michael Callahan, executive vice president, general counsel, and secretary; Blake Irving, executive vice president and chief product officer; Ross Levinsohn, executive vice president, Americas; Rich Riley, senior vice president, EMEA Region; and Rose Tsou, senior vice president, APAC Region.
The news of Bartz's dismissal came after the stock market closed. But the company's stock climbed in after-hours trading by 90 cents, or 6.97 percent, to $13.80.