Internet search engine giant, Yahoo!’s troubles seem to
be far from over. A day after CEO Carol Bartz
was asked to step down by the company’s chairman, it is learned that the board
of Yahoo has put the company up for sale, and is currently looking for the
right bidder.
In her two year tenure as CEO of Yahoo!, Bartz had failed
to make much impact in the Western world, although Yahoo! made significant
progress in South Asia – especially India and China. India accounted for at
least 20 products from Yahoo!, many of which were assembled in Bangalore.
Bartz was instrumental in Yahoo!’s efforts to modernize
its technology platforms, with 33 additional sites across the Americas, EMEA
and Asia Pacific going live on the new global content platform, bringing the
total to 67.The Yahoo! website was also revamped several times in the past
couple of years with new additions, to cater to the media and advertising side
of the company, and it had even roped in Microsoft to handle its search engine
capabilities. Despite this, Yahoo!
reported a decline in revenue excluding traffic acquisition costs at $1,076
million for the second quarter of 2011, a 5 percent decrease from the second
quarter of 2010. It is believed that the decline is revenue was primarily due
to the revenue share related to the search agreement with Microsoft.
Bartz’s dismissal is not a major shock to Yahoo watchers
as her departure has been speculated for more than a year, but the timing of
the action comes as a surprise. Yahoo has a major client event in mid-September
and a change in leadership as the company enters a generally strong fourth
quarter is curious. While not easily confirmed, reports add to the mystery
around Bartz’s dismissal by saying it took place over the phone. Bartz had
another 15 months left on her contract,” said Allen Weiner, Research VP –
Gartner.
The recent reports of Yahoo!’s intention to sell the
company only go to show the increasing anxiety that the Board is facing with
regards to its troubled alliance with Microsoft, and being unable to cope with
intense competition from competitors like Google.
While in India, another popular US-based search engine AOL packed up operations
in India last year due to severe financial troubles, Yahoo! may be fearing the
same fate elsewhere in the world if its current operational scenario continues,
and its attempts at selling the company and revamping its top management may be
part of last-ditch efforts to save it from the same. However, consolidation
with another search giant may also help Yahoo!, and the company could perhaps
gain from some valuable marketing lessons.
Neither the micro nor macro view of Yahoo!’s performance
since Bartz took over in January 2009 paint a pretty picture. The big picture
shows that the Microsoft -Yahoo!
search alliance has not gone to either party’s satisfaction and that Yahoo! has
lost a number of key executives and was caught so short staffed is pointed to
being undermanned as a reason for a disappointing Q2. Yahoo! still calls itself
a media-technology company but has a leader at the helm that had neither media
nor web technology chops. At the micro level, Yahoo! many of the company’s
headline projects such as Connected TV and Livestand seem to be moving at a
snail’s pace and its social media strategy is and has been a work in progress
at best,” Weiner added.
The conundrum for Yahoo! in recent years has been its
inability to develop an identity and sell that to employees, advertisers,
partners and consumers. Yahoo! has some great piece parts – messaging used by
hundreds of millions of users worldwide; a sports brand that stands apart from
other web properties and strong content plays in news and finance. Yahoo! has
yet to find a leader who has the vision to frame those pieces into cogent
opportunity that would lead a transformation resulting in a 21st century
media-technology power.
Morse is not likely to be more than a short-term
solution. No successful media company in recent memory has been helmed by a
finance guy. The company could look inward to EVP Ross Levinsohn former
President of Fox Interactive or could begin the challenging search for a rare
Steve Jobs-like
leader who can spin the dials of the Yahoo! Rubik’s Cube and revive this
once-iconic brand,” Weiner added.
By Beryl M
editor@telecomlead.com
