By Scott Morrison
Of DOW JONES NEWSWIRES
SAN FRANCISCO -(Dow Jones)- The expected appointment of Carol Bartz as Yahoo Inc.'s (YHOO) next chief executive sparked concern because of her lack of Internet experience, but some prominent Silicon Valley observers said Bartz was just the type of strong leader the struggling Internet giant desperately needs.
Bartz, the former chief executive of software maker Autodesk Inc. (ADSK), will immediately face several key decisions, including whether to turn around a cohesive Yahoo or sell parts of the company in order to focus on its popular Web properties. Her challenge is to revive Yahoo's listless performance and sagging stock price amid an economic recession.
The Wall Street Journal on Tuesday reported that Bartz has accepted the challenge of running Yahoo. The company declined to comment. Yahoo shares, down 60% from its year high, slipped 12 cents Tuesday to $12.10.
Bartz will replace Yahoo co-founder Jerry Yang, whose resignation was seen as a catalyst for much-needed change at the struggling Internet giant. Yang was widely criticized for failing to drive radical changes at the company and rejecting an offer from Microsoft Corp. (MSFT) that was worth almost three times the current value of Yahoo stock.
Once the leader in Internet advertising, Yahoo has been losing share in the market for Internet search to Google Inc. (GOOG), and it has been unable to make as much money per search as its larger rival. Yahoo also has been hard hit by the weakening economy because it is more heavily exposed to the slumping online display advertising market.
Bartz will likely be forced to decide whether to sell all or some of Yahoo to Microsoft, which last year offered $47.5 billion to buy the struggling Internet company, now with a market cap of $16.8 billion. Microsoft has indicated that it still might be interested in buying Yahoo's search business, and some investors have been lobbying for a breakup of the Internet giant.
Her critics, however, complain that Bartz's lack of experience in online advertising and the consumer Internet would hamper her ability to effect rapid and dramatic change at the company.
Eric Jackson, president of Ironfire Capital LLC and an outspoken critic of Yahoo's management, said Bartz's appointment pointed to "more of the same" at Yahoo because of her limited Internet experience and existing relationships with Yang and Yahoo President Sue Decker, who was also a candidate for the top post.
"(Bartz) will be operating at a different scale, and the industry relevance is also obviously missing. I think she is definitely going to look to Yang and the old board for guidance," said Jackson, who recently sold most of his group's Yahoo shares because of growing concerns about the lack of direction at the company.
One employee said word of Bartz's appointment was poorly received in his department. "Everyone around here is dumbfounded. Remember what happened to Titanic?" noted the employee, who commented on the condition of anonymity.
Other prominent Silicon Valley voices, however, praised Bartz's selection. Joseph Grundfest, professor of law and business at Stanford University, said Bartz's appointment was an "inspired choice."
"There are very few people who understand tech and the consumer space like Carol does, and there are very few people with the leadership skills that she has," said Grundfest, who has known Bartz for many years.
Grundfest rejected arguments that she lacks Internet experience, noting that Autodesk under Bartz adapted well to changes in the Internet environment. "That's very good evidence that she gets it - it being the Internet," he said.
Gartner analyst Alan Weiner praised Bartz as a "solid and safe choice" who as a vice president at Sun Microsystems Inc. (JAVA) during the dotcom boom was instrumental in helping grow the company into a billion-dollar-plus giant.
"What the company lacks is a firm business leader that can instill confidence in Wall Street, major partners, advertisers as well as Yahoo employees," Weiner wrote in a blog post. "Bartz is a leader for tough times, having fought through numerous brand and product reinventions not to mention economic climate changes."
Bartz still serves as executive chairman of Autodesk, which she ran as CEO from 1992 to 2006. Autodesk is around half the size of Yahoo, with about 7,000 employees worldwide. During her tenure, the company diversified its product line and grew revenues from $285 million to $1.523 billion, in her final year.
Bartz also sits on the boards of Cisco Systems Inc. (CSCO), with Yang, and Intel Corp. (INTC), with Decker, who also was a candidate for the top Yahoo job.
-By Scott Morrison, Dow Jones Newswires; 415-765-6118; scott.morrison@dowjones.com
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Publié le 13 janvier 2009 Copyright © 2009 Dowjones