Banking

Yahoo's boss is not up to the challenge

Superstar executives usually lose momentum sooner or later. The same holds true for fast growing organizations. In this blog, John McKee asks if Yahoo and its CEO Carol Bartz have moved from "hot" to "not".

 In an article in the Los Angeles Times, Jessica Guynn questioned if Yahoo boss Carol Bartz has run out of time in her role. Guynn says Bartz hasn't delivered as hoped and posits that she may soon be pressured out of the organization. I agree.

Brought in to fix a broken company, Bartz immediately made some good executive and structural changes.  With two core objectives as the new CEO, she said that she'd fix the company and get it back onto its former greatness. Industry watchers were split -- she had no history in the Search business, but a few decision makers clearly had fallen in love with her tough, can-do attitude at other organizations within the tech sector. (Even those outside the tech industry were fascinated: an article in Esquire magazine led with this headline,"Hi, I'm Carol Bartz. Are you an as*h*le?")

When she arrived, she said that her first objective would be to deal with the formerly great company's lack of strategic focus. Her stated intention was to force Yahoo's various arms, and key executives, into moving in the same direction. She noted that this, by itself, would drive up the stock prices / company value. Then, she'd focus on getting the organization acting more cohesively, in a smarter direction.

At the time, I was inclined to think she had the right stuff. She was not as well known to the outside world as many male tech sector CEOs, but her entire history was one of overcoming the odds. In "Can Yahoo Succeed under Carol Bartz?" which I wrote back in January 2009, I cited her successes in other jobs where people said she'd fail. I thought we'd see some solid growth, reduced expenses, and increasing stock prices within 12 months. And she did do some of that.

But her biggest move was a deal with Microsoft boss Steven Ballmer in July 2009. It was expected to raise revenues by up to $500 million a year. Although the deal helped initially, since then its overall impact seems to have been too little too late for the company's investors.

Although Yahoo is trading higher now than it was, about $16.10, it never broke $20 in the past year. Yesterday's (October 19, 2010) quarterly report made shareholders even more interested in a new direction. She's lost the faith of lenders. Despite doing some things well, many decision makers involved with stock issues are now pushing for a deal with AOL.

If Yahoo is to continue as an important factor in the industry, it's time for a new leader with a different approach.

Here's to your future.

John

About

John M. McKee is the founder and CEO of BusinessSuccessCoach.net, an international consulting and coaching practice with subscribers in 43 countries. One of the founding senior executives of DIRECTV, his hands-on experience includes leading billion d...

6 comments
osel091
osel091

Yahoo still has the potential to compete with FB,Google,AOL,MSN..all they need is a good social networking entity..and they already have lots of messenger users who can migrate to same

NickNielsen
NickNielsen

It's often been said, but this is the first time I've actually seen it: nothing of substance in the IT Leadership blog. http://i111.photobucket.com/albums/n152/nnielsen/TR/ITLeadership.png :D

kevaburg
kevaburg

In the case of Chiles trapped miners, all that had to be done was drill a hole and take them out. The theory is great but it took a long time. But it was an unprecendented success. Britains coalition government have made some massively sweeping economic reforms but have admitted that it might take a couple of years before the benefits become tangible. Now Yahoo has a new leader. She has made bold promises and up until now has not displayed any real and tangible proof that her plans will bring the company back to the forefront. Business has a way of always looking bad before it looks good and this is no exception. As a business owner myself, I know that I had some very sceptical (sometimes cynical) looks from my employees and my bank when considering a new concept, product or service, and although they haven't always been as successful as I would like, I have had a good deal more success than failure. And most of the time this has happened over a period of months of blood, sweat, tears ad no sleep. I believe it is far too soon to be judging this lady on results so far and the investors and stockholders are going to have to wait to see a return on their investment. But I also believe that a good result has a good chance of materialising.

Colnar
Colnar

You make a lot of good points. The problem is that nowadays investors what fast returns and impatient.

kevaburg
kevaburg

Investors want a very high ROI with very low TCO! Investing is about taking risks at a (normally) financial level. Investors should (although don't always) expect to have to invest their money for a number of years before the investment yields the expected return, if it even does! She has made very bold turn-around decisions and made very bold (arrogant?) statements about her predicted success. Whether or not this was a good idea remains obviously to be seen, but those that invested in Yahoo! need to be patient and let her do what she is hired to do.

CareerCoach
CareerCoach

Has Bartz gone as far as possible with it as a "Stand Alone" organization?

Editor's Picks