Analysts Take Heart in Selection of New Yahoo CEO Carol Bartz
Analysts from IDC and Altimeter Group appreciate Yahoo's appointment of Carol Bartz as CEO. Bartz is known for her no-nonsense management style, which she will need to streamline the relatively rudderless ship of search, cloud computing and application development. Bartz will try to keep Yahoo floating in the Web services sea with Google and Microsoft, which would love to eat its search share and display advertising lunch.The rumors proved true and former Autodesk CEO Carol Bartz was picked to succeed Yahoo founder Jerry Yang as CEO for the beleaguered Internet company Jan. 13, the latest step in the company's turnaround plan.
Bartz was CEO for Autodesk, a computer-aided design software maker, for 14 years, where she boosted sales from less than $300 million to more than $1.5 billion. Bartz also worked at Sun Microsystems, Digital Equipment Corporation and 3M, underscoring a commitment to the enterprise.
If there is anything that makes analysts uneasy about the appointment, it is Bartz's strong roots in the enterprise; Yahoo is a media company with a focus on Web services. This disparity leaves analysts viewing Bartz's lack of a media-oriented background as a positive and a negative. IDC analyst Karsten Weide told eWEEK:
The obvious downside is that she is not a media type. But that is not Yahoo's major problem right now. Yahoo's major problem right now is operational issues and she's a strong executor. She is good at process and that's what Yahoo needs right now. They need someone from the outside with a fresh view upon what's going on at Yahoo who can clean up the mess, both organizationally, but also in terms of the product portfolio. That is a major strength she brings to the table.What mess is Weide referring to? While Google and Microsoft are girding for battle in search, online advertising and other Web services, Yahoo has struggled deciding what assets to keep and which ones to jettison.
The company has laid off employees and snuffed out some projects, including Brickhouse and Kickstart.
Worse, Yahoo is hemorrhaging talent, with key search executives such as Qi Lu heading to Microsoft. Yahoo del.icio.us founder Joshua Schachter started working at Google this week after leaving Yahoo in June.
Part of Yahoo's malaise comes from expending the energy to fend off a $44.6 billion acquisition attempt from Microsoft in 2008, a fight that seemed to sap more energy from Yahoo and expose then CEO Jerry Yang as being unequal to the task of steering the ship through rough waters.
This is where Bartz excels because she understands how to execute and comes from a technology company, which will be valuable in helping Yahoo's crown jewels of search and display advertising, Weide told eWEEK.
Weide is also encouraged that Yang is going back to his role of Chief Yahoo, where he helps Yahoo maintain a "cool" factor that Yahoo needs for marketing.
Altimeter Group analyst Charlene Li said it will take Bartz some time to evaluate Yahoo and begin turning things around. "But she's a very experienced CEO, so she knows how to operate. She's going to come in with a lot of authority to make some radical changes that need to be made."
Li said she hopes Bartz keeps the Yahoo Open Strategy, which the company began in mid-2008 to rewire its Yahoo Search and Yahoo Mail applications to let third-party programmers augment search results and social interactions. Li added:
I think the biggest issue is getting all the people behind these different strategies, behind the old Yahoo strategy and the new Yahoo strategy to work together in a concerted effort. Especially in these lean economic times, she's going to have to figure out what is going to be priority and what is going to be funded and what it isn't. It's going to make a lot of people very disappointed because pet projects are going to go by the wayside.
Bartz is already showing evidence of her seriousness, cutting short a conference call with press and analysts Jan. 13 to attend a management meeting. AllThingsDigital's Kara Swisher also dug up a 1992 profile of Bartz here.