Yahoo, hampered by takeover attempts and struggling with diminishing returns for the last three years, decided on its new leadership direction Jan. 13 when it introduced the former CEO and current executive chairman of Autodesk, Carol Bartz, as its new CEO.
Bartz, 60, replaces Yahoo co-founder Jerry Yang, who resigned Nov. 17 as CEO but remains chairman of the board. Bartz will also become a board member at Yahoo.
Before becoming Autodesk’s executive chairman three years ago, Bartz transformed the company into a leader in CAD software. During her tenure as CEO from 1992 to 2006, Autodesk revenues increased from about $300 million to more than $1.5 billion, and the company’s share price increased nearly tenfold.
Yahoo President Sue Decker announced that she will also resign, following an “unspecified transitional period,” the company said.
“There is no denying that Yahoo has faced enormous challenges over the last year, but I believe there is now an extraordinary opportunity to create value for our shareholders and new possibilities for our customers, partners and employees,” Bartz said during a conference call with analysts and media representatives. “We will seize that opportunity.”
Yahoo is a “powerful global brand with a great collection of assets, strong technology and enormously talented employees,” Bartz said. “The company has accomplished a great deal in its relatively short history and I look forward to working together to take it to the next level.”
Only person offered the job
Yahoo Board Chairman Roy Bostock, Yang’s most powerful board supporter and the man who lobbied hardest for him to return as CEO 18 months ago following the departure of former CEO Terry Semel, said Bartz was the only person offered the job.
“She is the exact combination of seasoned technology executive and savvy leader that the board was looking for, and we are thrilled to have attracted such a world-class talent to Yahoo,” Bostock said. “She is admired in the Valley as well as on Wall Street for her deep management expertise, strong customer orientation, excellent people skills and firm understanding of the challenges facing our industry.”
Background and Challenges
Yang: back to being “Chief Yahoo”
Yang announced his resignation as CEO Nov. 17 after facing months of grueling pressure from shareholders and employees and an unsuccessful hostile takeover attempt by Microsoft.
In an e-mail to all Yahoo employees on that day, Yang, who had been encountering a great deal of criticism in the wake of the botched merger with Microsoft, said he would return to his former role as so-called Chief Yahoo when a new CEO was named.
A substantial number of Yahoo shareholders were in favor of accepting a $47 billion bid to sell the company to Microsoft in February 2008. But Yang and a majority of the board members were against it, and they prevailed.
Microsoft then returned with a smaller offer to buy Yahoo’s crown jewel: its Internet search business, second in size, scope and income only to Google’s. But Yahoo also turned that offer down.
Yang and the board faced a number of unhappy shareholders at Yahoo’s annual meeting on Aug. 1, 2008, but were steadfast in their desire to remain independent from the world’s largest software company.
If Yahoo had been stronger financially in the last two years, it’s possible Yang could have won out and remained as CEO. But the company stock value has dropped from a recent high of $33.63 in October 2007 to $19.80 on Aug. 1, 2008. The stock continues to slip; it closed at $12.10 on Jan. 13.
Microsoft CEO Steve Ballmer has since said although there still might be a chance for a deal, he doesn’t believe it will ever happen.
Entrepreneur Carl Icahn, who owns about $1 billion worth of Yahoo stock-almost 5 percent of the company-tried to facilitate the Microsoft takeover over a six-month period. As part of a deal to placate him, the Yahoo board offered Icahn and two people of his choice seats on the board.
Icahn is expected to join the board in January.
More Bartz background
In her 32-year career thus far, Bartz in addition to her tenure at Autodesk has led global operations, engineering, sales and marketing organizations for large technology and engineering companies that include Sun Microsystems, Digital Equipment Corporation and 3M.
Bartz has served as lead independent director of Cisco Systems since 2005 and has been a board director of that company since 1996. She also currently serves on the boards of directors of Intel and NetApp. She holds a bachelor’s degree in computer science from the University of Wisconsin.
Yahoo will announce its quarterly financial results on Jan. 27. Go here for more information.