What’s next for Yahoo in the wake of its abrupt firing of CEO Carol Bartz?
If someone really knows, then Yahoo probably wouldn’t be in the position it is now, a rudderless, gutted ghost ship that enjoys a huge legacy audience, but that hasn’t managed to upgrade or direct itself sufficiently to compete in a media world that is increasingly centered around users’ behavior and social connections.
While the well-compensated Bartz took the fall for the lack of lift-off of Yahoo’s stock price under her relatively short tenure, Yahoo’s board has also come under fire in popular commentary. After all, it has replaced three CEOs in just over four years.
Nevertheless, investors cheered the move Wednesday, sending the stock up 4 percent Wednesday in the wake of Bartz’s firing.
Standard & Poor’s Equity Research’s tech stock analyst Scott Kessler seemed to summarize many people’s opinions best with his Wednesday morning research note:
“We agree with YHOO transitioning from Carol Bartz as CEO, Kessler wrote. “We think YHOO needs more of a visionary leader who has focused on internet content/advertising.”
He added:
Bartz did complete some significant restructuring and diverstiture efforts, and added key executives Blake Irving and Ross Levinsohn over the past 17 months.
We also think YHOO’s board needs to be more accountable, given that it played a major role in rejecting acquisition overtures from Microsoft and not overseeing the company’s important investments in China as closely as we think it should have.
The rise in Yahoo’s stock price might also reflect investors’ belief that perhaps now Yahoo might finally sell itself to another company — now, finally Microsoft perhaps?
“We believe that it is more likely that the board reaches an agreement to sell the company or parts of the company before a new CEO is found,” wrote Youssef Squali, an analyst with Jefferies & Co., in a report Wednesday.
Paul LaMonica, a columnist at CNN Money, argues that Yahoo should sell itself to Microsoft because Microsoft’s online services division is suffering from the opposite problems that Yahoo has in a sense — its revenues are growing, but it is operating at a loss.
“A combination of Microsoft and Yahoo would arguably lead to even more opportunities to lower expenses and finally turn Microsoft’s online unit into something that generates real earnings,” he writes.
Putting two ailing units together doesn’t particularly sound like a great strategy, but if not Microsoft, it’s likely to be another entity that could see some use for Yahoo’s assets. The company has been flailing around for the past decade missing opportunity after opportunity, and it seems that more and more people are losing faith in its board.
“Yahoo’s business has already been damaged,” Trip Chowdry, an analyst at Global Equities Research told The Guardian.
Chowdry adds that the result is that he doesn’t think Yahoo will be able to attract top talent to resuscitate itself.
As anyone who’s followed public companies for any time knows, you can gin up any metrics you like, but ultimately, the leading companies of each sector all have great management, and the ones that don’t ultimately fall apart or get sold off in pieces to others.
