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With Bartz out, Yahoo must refocus or die

With rivals like Google and Facebook, Yahoo needs to regain footing fast

September 7, 2011 01:29 PM ET

Computerworld - With Yahoo languishing in the face of competition from the likes of Google and Facebook, the ouster of CEO Carol Bartz gives the company a chance to refocus and reinvigorate itself.

Yahoo announced late on Tuesday that Bartz, who had been with the company for just under three years , had been fired. Tim Morse, Yahoo's chief financial officer, has stepped into the top seat until a permanent CEO can be found.

Under Bartz's stewardship Yahoo has continued to falter. Once an Internet pioneer and online giant, the company has struggled financially. And at a share holder meeting in June, one investor blasted Bartz for the company's limp stock price and her market strategy, and even called for her departure.

During that conference call, Yahoo Chairman Roy Bostock defended Bartz, saying she had made "demonstrable progress" and adding that she had the confidence of the board of directors.

"Sadly, this was not a surprise, as Yahoo! has been languishing for some time, unable to find a sense of focus and direction opposite more energized advertising-based rivals Google and Facebook," said Bradley Shimmin, an analyst with CurrentAnalysis. "In many ways, public companies are like sports teams. When faced with longstanding disappointment, ownership, or the board, takes the most expedient and most affordable action available -- fire the manager/coach, or CEO. In most cases, this single stroke serves as a minor kickstart for the team."

Analysts are split on whether or not Bartz, who was known for her public expletive-filled outbursts, made any major business mistakes.

Shimmin weighs in more on Bartz's side.

"I think Bartz faced a daunting challenge when she took over the reins two and a half years ago, during a time when many advertising companies were just beginning to see positive movement," he noted. "I don't believe she made any major missteps. If anything, I think her conservative approach coupled with Microsoft's failed purchase attempt and subsequent partnership, stalled any potential rebound."

However, Dan Olds, an analyst with The Gabriel Consulting Group, said Bartz may have been leading a troubled company but also added to Yahoo's woes.



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