Yahoo's Bartz Ouster a Comment on Bing Search Deal?

 
 
By Nicholas Kolakowski  |  Posted 2011-09-07 Email Print this article Print
 
 
 
 
 
 
 

Yahoo CEO Carol Bartz has been ousted from the company. One analyst thinks Microsoft's search-engine deal with Yahoo wasn't going well for the latter.

Carol Bartz is out as CEO of Yahoo.

What this means for Yahoo in the longer term is something analysts and pundits will pick over for the next few days and weeks. Within hours of the announcement that Bartz was stepping down, Gartner analyst Allen Weiner issued a research note that characterized the dismissal as unsurprising, considering the slowed or stalled progress in many strategic areas. 

For her part, Bartz was characteristically blunt about what happened.

"I am very sad to tell you that I've just been fired over the phone by Yahoo's Chairman of the Board," Bartz wrote in a widely circulated email to Yahoo employees. "It has been my pleasure to work with all of you and I wish you only the best going forward."

In a Sept. 6 press release, Yahoo board Chairman Roy Bostock praised Bartz "for her service to Yahoo during a critical time of transition in the company's history, and against a very challenging macro-economic backdrop."

Bartz oversaw Yahoo's wide-ranging search deal with Microsoft. Under the terms of that agreement, Microsoft's Bing powers backend search for Yahoo's branded Websites, while Yahoo handles a significant portion of advertising salesforce duties for both companies. "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," Weiner wrote in his research note. "The conundrum for Yahoo in recent years has been its inability to develop an identity and sell that to employees, advertisers, partners and consumers."

In the wake of the Microsoft deal, Yahoo executives repeatedly insisted that their company would maintain and expand its online identity, even if Bing handled the underlying search apparatus. Microsoft and Yahoo completed the search integration in the United States and Canada in the back half of 2010. In early August, Yahoo started to migrate organic search results in the European market over to Bing.

The Yahoo agreement proved something of a boon to Bing, essentially doubling its market share. Nonetheless, Google continues to maintain a healthy lead in the U.S. search engine market, with research firm comScore estimating its July share at 65.1 percent. Yahoo came in second with 16.1 percent, and Bing third with 14.4 percent. If you blend Yahoo's share into Bing's, then Microsoft owns roughly one-third of the total market.

In broad strokes, those numbers remain little changed from previous quarters. Did that immobility help force Bartz's ouster? Whatever the case, Yahoo seems on the verge of another rocky transition period.     

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Editor's Note: This story's market-share figures from comScore were corrected.

 
 
 
 
 
Nicholas Kolakowski is a staff editor at eWEEK, covering Microsoft and other companies in the enterprise space, as well as evolving technology such as tablet PCs. His work has appeared in The Washington Post, Playboy, WebMD, AARP the Magazine, AutoWeek, Washington City Paper, Trader Monthly, and Private Air. He lives in Brooklyn, New York.
 
 
 
 
 
 
 

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