"Yahoo is fundamentally sound. All it needs is someone who kicks some ass. The stories that I read about her from her previous job, I think she is the person to do that."
That comment was told me by an industry analyst, who in talking about Yahoo's appointment of Carol Bartz as CEO yesterday asked to remain anonymous because of the coarse diction. But that's exactly what Yahoo needs: Someone to shake things up and get the company back on track.
Yahoo, see, is still punch drunk from blow after blow. The stock is down $20-plus from a year ago, key talent is gone and cutting-edge efforts have been shelved.
Yahoo has been rudderless since Yang said he was stepping down Nov. 17, but let's face it, Yahoo has been rudderless since Yang took over the CEO helm back in the summer of 2007. That's a long time to be operating a vessel without a sure captain.
There's a lot of great coverage of Bartz's appointment, arguably the biggest news for the Internet sector in this new year. You can read it here on TechMeme, but I want to spotlight some of the highlights.
First, let's give Bartz, the former Autodesk CEO, time to process what's going on, or what isn't going on that should be, at Yahoo.
OK, that took all of an Internet minute, so how long do you give her at Yahoo before Microsoft CEO Steve Ballmer gets her on the horn to talk deals, as in Microsoft buys Yahoo for a bargain deal? There is no clear consensus on this one, but there are two divergent schools of thought.
AllThingsDigital's Kara Swisher talked to sources who told her "a search partnership deal between the companies is more likely to be signed quickly now that Yahoo" has picked Bartz as the chosen one. Such a deal could happen as soon as Jan. 27, or Yahoo's next earnings report, Swisher said.
The deal is more likely to be a search partnership, as in Yahoo outsourcing its search to Microsoft, and not the type of full-on merger Ballmer proposed nearly a year ago.
Yet another school of thought comes from Neil Sims, a managing director at executive search firm Boyden's technology practice group, who told Reuters:
"The selection of Bartz is a declarative statement for Yahoo, that 'we are not for sale'. She doesn't have the M&A dealmaker profile you'd expect Yahoo to select if (selling) was their overt intention."
So, would Bartz sell Yahoo to Microsoft, or simply strike a deal to sell Yahoo Search to Microsoft? My Microsoft Watch colleague Joe Wilcox and I agree selling just the search to Microsoft would lobotomize Yahoo and a full M&A seems counter to Bartz's nature.
Perhaps there will be a search ad deal akin to what Google and Yahoo planned in June, with Microsoft serving Yahoo search results in Live Search. How weird would that be?
Whatever the direction Bartz finds herself leaning in, it better be one aimed at attacking search leader Google and Microsoft, both of whom are on solid ground structurally and operationally -- the areas Yahoo isn't sound.
Incredibly, Yahoo doesn't seem to have lost a lot of search market share through all of this. Google has chomped share from all search engines, but that's nothing new.
Yahoo also gets kudos for executing on its Yahoo Open Strategy. Neither Google nor Microsoft have anything like YOS, but unfortunately novelty doesn't translate to revenues. Just as tech geeks and analysts grew to love SearchMonkey and the new Yahoo Mail, the company has lost credibility because of the talent drain.
Google and Microsoft are taking its talent and looking to accelerate their search, mobile ad and other Web services strategies. These are areas Yahoo used to excel in. Now? Who knows.
Yahoo recently secured Samsung Electronics to deliver Yahoo Internet widgets to Samsung televisions and hooked Virgin Mobile in the U.K. and T-Mobile in the U.S. to use Yahoo oneSearch to power mobile Web searches. So, clearly, business partners still believe in the Yahoo brand. Will these types of deals satisfy the market?
Regardless, Bartz must quickly identify new opportunities and execute on them. Another editor asked me if I thought she could turn the company around. I honestly don't know. I do know that she can't do any worse than the amorphous mess Yang and his predecessor Terry Semel left.
I agree with the analyst that Yahoo is fundamentally strong. It's just that the fundamentals have gotten buried by so much dithering and uncertain change.