Did Yahoo CEO Carol Bartz Grade Herself on a Curve?
Shares of Yahoo, which have been crushed over the past few years, staged a comeback in 2009, gaining more than 28%. Investors were optimistic about the company's Internet search and advertising deal with Microsoft (MSFT) and its ability to compete with Google (GOOG), whose shares gained more than 84% during Bartz's tenure. Data from Experian Hitwise shows that Google accounted for 71.57% of all U.S. searches conducted in the four weeks ending Nov. 28, 2009. That's a gain of 1% compared with the previous month. Yahoo had 15.4% of the market and Microsoft's Bing platform had 9.3% of the market. Both companies lost ground to Google.
In an interview with Bloomberg, Bartz said she underestimated the challenges she faced when she took the job following co-founder Jerry Yang's disastrous tenure.
"I did move fast, but this is a big job, " Bloomberg quotes Bartz as saying.
That's an understatement. Bartz has to make Sunnyvale, Calif.-based Yahoo relevant in the age of Facebook and Twitter. Media companies still are not sure if Yahoo is a friend or an enemy as it develops more original content. Advertisers are also increasingly drawn to smaller, specialized niche sites that enable them to more easily target their marketing messages at lower costs.
Bartz has cracked the whip at Yahoo, shutting down underperforming businesses and slashing the company's workforce by 5%. Investors remain bitterly disappointed that the company failed to sell itself to Microsoft in 2008. The company has also redesigned its home page, giving it a less cluttered look. Some analysts expect Bartz to be able to bolster sales by 10 percent annually.
If she can revive Yahoo from death's door, Bartz will be hailed as a hero on Wall Street and in Silicon Valley for generations to comes. But she is nowhere near the point of success. Her one-year anniversary is next week. Yahoo's shareholders are in no mood to celebrate.