SUNNYVALE, Calif. — Yahoo fired Carol Bartz as chief executive Tuesday after more than 2 1/2 years of financial lethargy that had convinced investors that she wouldn’t be able to steer the Internet company to a long-promised turnaround.
To fill the void, Yahoo’s board named Tim Morse, its chief financial officer, as interim CEO. Bartz lured Morse away from computer-chip maker Altera Corp. two years ago to help her cut costs. Yahoo said it is looking for a permanent replacement.
Bartz’s austerity campaign has helped boost Yahoo’s earnings, but the company didn’t increase its revenue under her leadership at a time when the Internet ad market has been growing.
Bartz’s inability to snap Yahoo’s financial funk, along with recent setbacks in an online-search partnership with Microsoft and an investment in Chinese Internet giant Alibaba Group, proved to be her downfall.
In an e-mail to employees titled “Goodbye,” Bartz wrote: “I am very sad to tell you that I’ve just been fired over the phone by Yahoo’s chairman of the board.”
Bartz has been under pressure from her first day in the job to turn the company around, and in recent months, the pressure from major investors intensified. The company remains adrift despite management-team shuffles, layoffs and the shedding of underperforming services.
Yahoo has now replaced three CEOs in a little more than four years. During that time, Yahoo has lost ground in the Internet ad race to online-search leader Google and Facebook, even though its website remains among the world’s most popular. Her ouster comes with 16 months left on a four-year contract that she signed in January 2009.
Yahoo’s stock price closed Tuesday at $12.91. That’s 50 cents, or 4 percent, higher than where Yahoo shares stood when Bartz was hired as CEO. During the same period, Google’s stock price has risen by more than $200, or 66 percent.
Yahoo shares moved up 6 percent in after-hours trading.
Colin Gillis, an analyst with BGC Partners, said the board should share some of the responsibility for Yahoo’s stagnation and itself should be replaced.
“The board needs to look in the mirror,” he said. “Where’s the board’s culpability in this?”
