Bartz is gone

Rico says that The New York Times has three (at least) articles about the firing of Carol Bartz.
The first is by Claire Cain Miller and Verne Kopytoff:

Yahoo has been one of the most-visited sites on the internet since its glory days as a web portal. Yet, as the rest of the internet moved on to social networks and mobile devices, Yahoo has failed to keep up. That became painfully clear when Yahoo’s board abruptly fired its chief executive, Carol A. Bartz. She had focused on bolstering Yahoo’s online media and original reporting, but neglected to develop the new social networking tools, video services, or mobile apps that people now prefer to use. In that way, the tale of Yahoo’s misfortunes is not just one of management woes, but a vivid illustration of the transition from websites that publish professional content to a new digital world dominated by mobile phones and sites where the users are the content creators.
Yahoo’s problems are shared with another internet pioneer, AOL. Both astutely capitalized on the first huge shift in how people read, moving online from paper, but they failed to follow internet users and advertisers to cellphone screens and social networks. Both companies have tried to become media companies. Meanwhile, the next generation of companies, like Google and Facebook, have happily satisfied the demand for information and entertainment; not by creating content, but by building mobile and social networking services that attract users and, increasingly, valuable advertisers.
“Yahoo hangs on to the pieces that made it a giant years ago,” said Shar VanBoskirk, a digital marketing analyst at Forrester Research. “It assumes people will come to its website, but what users are looking for now is a much more syndicated experience that allows them to go to mobile devices and co-create content.” As the way people use the internet changed, she said, Yahoo and AOL “hit the wall and didn’t continue to evolve as the rest of the market did.” Yahoo’s sites, like its home page, email service, and sites for finance and entertainment, still have a huge audience— 177.6 million unique visitors a month, according to comScore— second only to Google but more than Facebook. But, while Yahoo’s traffic has flattened, both Google and Facebook are growing in popularity, and people spend about half as much time on Yahoo as they do on Facebook.
Advertisers are chasing what they say is more profitable prey: users of smartphones, video sites and social networks, and the companies that cater to them. Yahoo has always led in one of the most important corners of the advertising marketing: display ads, those that show images and video. But Facebook and Google are closing in on Yahoo, in large part because they can offer advertisers more personal information about users.
Yahoo’s slice of the display advertising pie has shrunk for three years in a row, according to eMarketer, a digital-marketing research firm. Last year, its share of display ads was 14.4 percent, compared with 12.2 percent for Facebook and 8.6 percent for Google. But, this year, Facebook will surge ahead of Yahoo with 17.7 percent to Yahoo’s 13.6 percent, eMarketer predicts. And, by next year, Google will have nearly caught up to Yahoo, too, with 12.3 percent of display ads compared with 12.5 percent at Yahoo and 19.4 percent at Facebook.
“Yahoo still has an enormous amount of traffic,” said David Hallerman, principal analyst at eMarketer. “But more and more ad buys are being made in a more targeted way.” Advertisers are attracted to information that Facebook has about a user’s friends or Google has about a user’s search queries, he said. Hallerman compared Yahoo and its audience to the mass-circulation magazines of the 1960s, like Life and Look. Those publications were done in by the shift among advertisers to magazines aimed at specific groups, like celebrity news or golf. “The idea of a portal trying to be everything to everybody is outdated,” he said.
Advertising executives also criticized Yahoo for the shortcomings of its advertising technology as well as executive turnover that meant that every few months, ad agencies had to teach a new Yahoo executive about their accounts. “When you look at Yahoo, there’s a lot of distractions,” said Christian Juhl, president of the Western region at Razorfish, a digital ad agency owned by the Publicis Groupe.
In 2007, Google bought DoubleClick, a display advertising company, to compete with Yahoo. Two years later, Google had developed DoubleClick Ad Exchange, which was more efficient for buyers and sellers of ad space. It invested heavily to acquire or create tools for targeting, serving and optimizing online display ads. It has also invested in YouTube, its video site, to try to lure television advertisers to display ads.
“You see the likes of Facebook and Google eating their lunch,” said Julie Berger, vice president and managing director for digital at the Los Angeles office of Horizon Media, a leading media agency. “Consumers’ habits are changing,” and Yahoo executives have not sufficiently realized that, she said.
But even as internet users began to surf the web differently— reading bits and pieces on different sites and devices— Yahoo and AOL dug in, creating content as they had in their heyday in the 1990s.
Tim Armstrong, AOL’s chief executive since 2009, is investing heavily in news and original reporting. His biggest bet was to buy The Huffington Post, the news and aggregation site founded by Arianna Huffington, for $315 million earlier this year. He also bought the tech blog TechCrunch and is pushing into local news with Patch, which has reporters in more than eight hundred towns writing about city council meetings, neighborhood crime, and civic events. But, like Yahoo, Armstrong is dealing with unhappy shareholders and calls to break the company into pieces and sell them off. AOL has an investment bank and lawyer specializing in mergers and acquisition on retainer. A steady decline in its internet access business makes increasing its overall advertising business difficult. In the latest quarter, AOL reported a five percent gain in global advertising sales, its first increase since spinning out of Time Warner in 2009, but it remains a money loser.
Bartz took a parallel approach at Yahoo, hiring dozens of journalists and bloggers and buying Associated Content, which enlists amateur journalists to write about a variety of topics. Its first social network, Yahoo 360, introduced in 2005, never caught on.
Inside Yahoo, the management team held an all-hands meeting with employees to try to reassure them about the company’s future. Jerry Yang, Yahoo’s co-founder, who was pushed out as chief executive before Bartz was hired, said the decision to remove Bartz was a difficult one but the company should be growing faster. “We’re at a critical time in Yahoo’s history,” he said.
It may not have been what advertisers want to hear. “What advertisers want is an innovator, a partner that is going to help them know the next best place to reach their customers,” said VanBoskirk of Forrester. “Yahoo’s problem is they look like a legacy player that’s not thinking about the next thing.”

The second is by Verne Kopytoff and Claire Cain Miller:

Carol A. Bartz, Yahoo’s chief executive, was fired recently, ending a rocky two-year tenure in which she tried to revitalize the online media company. She went out with the same outspoken style she used while running the company. In an email she sent to employees from her iPad, 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 was informed of the board’s decision while she was traveling, according to a person familiar with the board’s action. She also wrote: “It has been my pleasure to work with all of you and I wish you only the best going forward.” (See the subsequent post for the complete story.)
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 shuffles, layoffs and the shedding of underperforming services. She engineered a deal that turned over its search operations to Microsoft, but that has also failed to live up to expectations.
Timothy Morse, the company’s chief financial officer, will serve as the interim chief executive. Yahoo also said it had started a strategic review of the company’s options, including possible divestment of its Asian holdings. It cautioned that no decisions had yet been made.
The company also said its directors named five other senior Yahoo executives to an executive leadership council that is intended to help Morse, a former chief financial officer at Altera, a semiconductor makers, and General Electric Plastics, manage the company.
“Yahoo hasn’t asserted what it wants to be, whether it wants to be a media or technology company, and Carol, rightly or wrongly, is being blamed for a bad search deal and a less than stellar performance,” said Jordan Rohan, an analyst with Stifel Nicolaus.
Investors have long tried to pressure Yahoo to sell the company, or at least sell major pieces of the company. Yahoo rejected a $33 a share buyout offer from Microsoft in 2008. Yahoo’s shares were essentially flat during Bartz’s two-year tenure, closing at $12.91 in regular trading on Tuesday. In after-hours, following the news of her departure, Yahoo’s shares gained 6.3 percent to $13.72.
Bartz joined Yahoo in January of 2009, after investors became dissatisfied with the stagnant growth and indirection under its previous chief, Jerry Yang, a co-founder of the company. Her hiring was initially met with optimism by Wall Street, which saw her as a tough-talking savior who could whip the company into shape. But online advertising revenue at the company remained flat even though the ad market was growing quickly.
Although Yahoo draws one of the largest audiences anywhere on the web— more than six hundred million unique visitors to all its services, including its search page and its media sites like news, finance, and sports— it has been unable to significantly increase its advertising revenue.
Yahoo’s share of display advertising in the United States, supposedly the company’s strength, is expected to decline to 13.1 percent this year from 14.4 percent in 2010, according to estimates from eMarketer, a digital marketing research firm. Meanwhile, Facebook is expected to gain market share.
As recently as June, Roy Bostock, Yahoo’s chairman, voiced support for Ms. Bartz. At Yahoo’s annual shareholder meeting, he lauded her for streamlining Yahoo’s operations, focusing the company on its strengths and overhauling its infrastructure. “The hard-won progress that we have made is why this board is very supportive of Carol and the management team,” Bostock said at the time.
But, more recently, Yahoo’s board concluded that it had given Bartz enough time and that a change in leadership was needed, according to a person familiar with the board’s action. The final decision was made during two meetings of the company’s board in recent weeks, without Bartz or Yang present.
Some analysts questioned why the directors had acted so suddenly, without having a successor ready. Criticism for the management of the company has also been directed at Bostock and the directors. Colin W. Gillis, an analyst with BGC Partners, said the board should share some of the responsibility for Yahoo’s stagnation and should itself be replaced. “The board needs to look in the mirror,” he said. “Where’s the board’s culpability in this?” He asked, “Are they going to seek a replacement, or is Tim just going to be tasked with carving the company up?”
A sale is a “nonstarter”, said a person familiar with the board’s action. More likely is a sale of Yahoo’s Asian investments— it holds valuable stakes in Chinese e-commerce conglomerate Alibaba Group and Yahoo Japan— or the sale of some of its communications services. “I think there’s a 50-50 shot that Yahoo gets pushed into play, and that investors try to wrest control of the company from its existing board of directors,” said Rohan, the analyst. “It’s not clear what investors could do right now except hope and pray that the interim leadership gets Yahoo back on the right track.”

The third is by David Streitfeld:

“I’ve just been fired.” With those four words, Yahoo’s chief executive, Carol A. Bartz, did something that dismissed managers almost never do: She told the truth.
In the upper echelons of corporate America, executives are forever leaving to 'pursue urgent opportunities', 'develop important new ventures', or, that old standby, 'spend more time with their long-neglected families'. Hardly anyone ever admits to being sacked. Even in cases where the executive has all but been bodily ejected from his executive suite— Rick Wagoner of pre-bankruptcy General Motors or Tony Hayward of post-oil-spill BP— the most they say is that they have been asked to step aside.
Bartz’s blunt statement, sent in an email blast to Yahoo’s 13,400 employees, immediately ignited a debate: was she a pioneer trying to provide more transparency and authenticity at the top ranks of prominent companies, or was her salvo an unprofessional tirade that was a personal and professional mistake?
Jeffrey Pfeffer, a Stanford professor who is an expert in organizational behavior, is in the first group. “The truth helps you improve,” he said. “When people lose jobs and there’s no acknowledgement, the potential for learning is lost.” Bartz’s comments also served her own cause, the professor said. “She’s acting as if this is not her fault. She’s not embarrassed. She’s controlling the story.”
But Jennifer Chatman, a professor and chair of the Haas Management of Organizations Group at the University of California at Berkeley, said Bartz’s angry words could help sink the struggling search portal. Now the directors who ejected Bartz are under attack at the moment employees need them to save Yahoo. “A chief executive who was thinking first about the long-term interests of her company would not have done this,” Chatman said, adding that there are problems of perception in this case as well: “She’s one of a handful of top female business leaders. It would be easy to attach this to a stereotype of women leaders as not in control of their emotions.”
Whatever the effect on Yahoo, unvarnished comments like Bartz’s are likely to become more common. Chief executives are increasingly conscious of their personal brand and how it can diverge from the corporate brand.
“I would say this is going to become much more of a trend,” said Homa Bahrami, a senior lecturer at Berkeley and an adviser to several Silicon Valley start-ups. “I see it already in private companies when there is a change in management. The chief executive picks up the phone and tells the investors exactly what happened. The younger generation appreciates this honesty. You’re authentic and you’re vulnerable.”
Authenticity, though, can backfire, and vulnerability is not always something to be desired. Executives who are not on their way out are learning that broadcasting their feelings can have unintended consequences.
Andrew Mason, chief executive of Groupon, may have thought he was only trying to buck up the troops when he sent a long email describing how the daily deals site was being misperceived in the press as it awaited its public offering. Mason may have even been secretly pleased when the email showed up in the press. Regulators cast a dim eye on such promotion during the so-called quiet period for companies waiting to go public, however, and Groupon’s offering is now at risk of being delayed or even pulled.
In the technology industry as in no other, failure is trumpeted as paving the way to glory. Executives love to boast about the number of times their company was denied funding or how no one wanted to hire them or how they learned so much when the whole ship went down. But such tales are always told from the vantage point of ultimate success. In the midst of failure, people are as reluctant to admit it in Silicon Valley as anywhere.
In 2005, when Carly Fiorina was pushed out of Hewlett-Packard, she merely spoke about her regret that she and the board had differing strategies, and said she respected its decision. In 2010, when Mark V. Hurd was pushed out of H-P, he said he would “move aside.”
If Bartz’s directness was so unusual, it was also in character. She has long been inclined to honesty, often in salty language. In one of her more printable comments, she listened to a shareholder suggesting she resign at Yahoo’s annual meeting in June. “That was certainly a downer,” she replied.
“Usually it’s in the interests of both the executive and the board to sugarcoat these things, but Carol just lays it out there,” said J. Hallam Dawson, chairman of IDI Associates and a former colleague of Bartz.
Bartz was on vacation on the East Coast, flying from Maine to New York, when she got the call from Yahoo’s chairman, Roy Bostock, relieving her of her duties. It was not a surprise. After being in charge for nearly three years, the company seemed more unable than ever to meet the challenge of Facebook and Google. “I am very sad to tell you that I’ve just been fired over the phone by Yahoo’s chairman of the board,” she wrote. She went on to say she had enjoyed her tenure at the company and wished the employees the best.
Management experts said the dismissal of chief executives is usually a more stately process, involving lawyers on all sides. It requires negotiation and press releases. And so the crudeness of Bartz’s firing might have helped spark her response. She did not respond to a request for comment.
At about the same time as Bartz was getting the news, Bank of America was also making some top management changes. In this case the traditional approach was followed, which meant the tone was upbeat. First the bank explained that it was simply “de-layering”. Then the chief executive, Brian T. Moynihan, saluted the departed, including Sallie Krawcheck, president of the bank’s global wealth and investment management division. Krawcheck responded that it had been “an honor” to work at the troubled bank. If this was an ouster, it came across as more of a retirement.

Rico says he met Ms. Bartz when he worked at Claris; she was friends with Bill Campbell. And 'fired over the phone'? That's cold. But it looks like there's a fine line between bucking up the troops and fucking up the troops...