Carol Bartz is a big girl with a potty mouth who can take the heat.And rest assured, there will be no shortage of criticism directed herway now that Bartz is out as Yahoo chief executive officer (fired onthe phone, no less.)
But as Bartz's name gets inscribed onto thelengthening list of failed Yahoo CEOs--a roster that also includesTim Koogle, Terry Semel and Jerry Yang--there are a couple of salientpoints to remember as revisionist versions of this chapter in thecompany's history start turning up.
- Don't pay attention to the meme that Yahoo is ungovernable becauseit's become the proverbial lost cause. The company still has enormousassets and remains one of the best-recognized Internet brands in theworld.
- With a board of directors as incompetent as this one, even themost talented CEO would be hard pressed to engineer a Yahooturnaround.
The surprise is that Yahoo has hired the wrong people for criticaljobs. When the board let Yang, a company co-founder, try his hand atrunning Yahoo at CEO, they put their bets on a technologist who hadnever been a chief executive or had deep operational experience.
After 14 years running Autodesk, Bartz was a known quantity. But shehad no advertising or consumer experience. Still, that was good enoughfor the board of directors to hire her. I suppose there is precedentfor parachuting CEOs into new situations where they have little or noexperience with a tech company's actual business. Think Lou Gerstnerat IBM. But Gerstner, one of the best tech CEOs ever, was an exceptionto the rule. With the benefit of 20-20 hindsight, the flame-out of theboard's last couple of choices to fill the top role are that much morepredictable.
"It's a terrible board," a person with deep ties to Yahoo told melate today after hearing the news of the latest corporatereorganization.
For board critics, Yahoo's refusal to accept Microsoft's $44.6billion buyout bid is Exhibit A (maybe going all the way to Z.)Back in Feb. 2008, Microsoft's $31-per-share stunner constituted a 62percent premium to Yahoo's trading price at the time. Considering howbadly Google was beating Yahoo in search, this could have been theproverbial life safer but Yahoo balked. Yang and board chairman RoyBostock rejectedthe offer as too low. After Bartz came on board Yahoo andMicrosoft settled on a lesserdeal in which Microsoft outsourced search services to Yahoo inreturn for a cut of search ad revenue. OK but not the sort ofworld-beating, transformative, shock & awe impact of aYahoo-Microsoft hookup. But that chapter is now history and given thedifferent trajectories taken since then by Yahoo, Google andMicrosoft, it's hard to imagine that another suitor might ever danglethat kind offer again.
Besides blowing the Microsoft deal, the board is also on the hookfor thinning out a roster that once was filled with experiencedexecutives, such as the ad sales head, Greg Coleman, or the chiefsales officer, Wenda Millard. Both knew the business that Yahoo was inand for whatever reasons, the board got rid of both of them.
"It's Bostock," this one Yahoo observer argued. "He's the same guy whoblew the Microsoft deal."
None of this means that Yahoo is can't pull itself together and makeanother run. But it presupposes that the board comes to a Socraticjuncture where it knows itself. Yahoo's fate remains bound up withaudience aggregation and audience monetization. As one of the topthree biggest sites on the Internet, the company should be able tosqueeze more profit out of a huge user base, even if it's not growingat Google-like rates.
This story originally appeared on CBSNews.com.