Yahoo's Bartz is Out, But Who's In?

Carol-Bartz

Is there any such thing as a turnaround specialist? In the wake of Carol Bartz's ouster as Yahoo CEO, speculation about who -- or what kind of leader -- should succeed her as head of the struggling Web portal is underway.

In announcing the company's "leadership reorganization" Tuesday, Yahoo's board of directors named CFO Tim Morse as interim CEO and said it plans to hire a nationally prominent executive search firm to find a permanent replacement for Bartz. Much of that decision will be come down to how the company plans to position itself as part of the comprehensive strategic review it will undertake in the wake of Bartz's exit.

In its statement Tuesday, the company did nothing to dispel conjecture that it could be considering massive restructuring, which might involve selling off its Asian assets --stakes in Yahoo Japan and Alibaba Group -- or an outright sale. "We are committed to exploring and evaluating possibilities and opportunities that will put Yahoo on a trajectory for growth and innovation and deliver value to shareholders," stated Yahoo Chairman Roy Bostock.

If that's the chosen strategy, then bringing in a turnaround specialist to start dealing all or parts of Yahoo would seem a more likely option. But wasn't Carol Bartz supposed to be the turnaround agent following Yahoo's failed merger with Microsoft in 2009? Wasn't her success in revitalizing Autodesk supposed to carry over to Yahoo despite her lack of any background in the Internet media or advertising business?

Her rocky tenure makes the case for hiring someone with a strong media background, especially if Yahoo ends up not pursuing any major transactions. Because Yahoo could end up acquiring in-play Hulu, and its CEO Jason Kilar is said to be already without a contract, his name is being tossed around the blogosphere as a potential candidate for the top slot at Yahoo. In addition to being a well-regarded CEO, he would also bring the requisite media and Internet background, with a resume that also includes stints with Amazon and Disney.

If Yahoo ends up looking inside, former Fox Interactive Media President Ross Levinsohn -- named last fall as executive vice president for the Americas at the company -- could get the nod. Of course, Yahoo went Hollywood previously when it brought on former Warner Bros. co-CEO Terry Semel in 2001 as chief executive for what now looks like a golden age. Remember: founder Jerry Yang wound up taking the reins again to refocus on search and competing with Google in 2007.

It's safe to say Yang isn't in the running for the CEO job this time around, after his own tumultuous tenure fighting off Microsoft's hostile takeover bid and overseeing a series of layoffs. Even bringing on an Internet-savvy media or advertising executive, however, is no guarantee that Yahoo will be able to reverse its fortunes. Just look at AOL under Tim Armstrong, still struggling to build its display ad business like Yahoo in the face of growing competition from Facebook and other social media rivals.

Whoever ultimately takes the top job at Yahoo will face a hugely uphill task restoring the brand's luster, given the company's umpteen rebranding campaigns, management reorganizations and leadership changes. There are only so many times you can slap the new-and-improved label on the site before it loses any credibility.

Solving Yahoo's perpetual identity crisis should be a top priority for the next CEO. The company has long been plagued by the infamous "peanut butter" problem of spreading itself too thin across different areas and opportunities from video to search to social networking without having a defining focus. Maintaining the all-in-one approach in a post-portal world doesn't work any more for Yahoo. And Bartz was not able to implement a new vision.

Perhaps for that reason, Wall Street analysts viewed the shakeup as a postive development for the company and investors were bidding up its stock Wednesday. But whether someone else can do better finding Yahoo's proper place in the rapidly shifting Internet landscape is far from certain. Till then, Tim Morse will keep the seat warm.

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