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Yahoo Punts Bartz

Carol Bartz

Carol Bartz via Wikipedia

Yahoo’s troubles are nothing new. So two days ago their board fired Carol Bartz, the potty-mouthed former head of Autodesk, after her stint of less than three years as Yahoo’s CEO. At the time she replaced at the helm Jerry Yang, Yahoo’s cofounder and the man singularly responsible for rejecting in 2008 Microsoft’s buyout bid that amounted to more than twice what the iconic Silicon Valley company is worth now. 

Carol’s comment about Yahoo’s decision was, not surprisingly, F-word foul. The stock market’s gleeful reaction was a two-point pop on the floundering stock. But Yahoo is not going anywhere anytime soon. They are making good money (both profit and cash), to the tune of almost $200 million last quarter, a very robust 20% net profit margin that would be the envy in any industry outside the heady Internet domain.

And Yahoo is still sitting on $2 billion, after spending many more billions on buying back their stock over the last five years. Their trouble is declining revenue (topline sales) over past two years, compared with Google’s current 30%+ revenue growth. So, Wall Street values Yahoo at $18 billion, to Google’s $170 billion, albeit the search giant having seven times the sales.

Some people claim spotting a decade ago Yahoo’s misguided desire to be a media company rather than a technology one. Facebook passed Yahoo in popularity last year, and they are known for cultivating a hacker culture. So, what will Roy Bostock, Yahoo’s Chairman of the Board do now? His credentials include sitting on boards of Delta and Northwest Airlines, neither a stellar performer. Mr. Bostock saw them through a merger in 2008, despite a consumer lawsuit and close regulatory scrutiny. But, an English major in college that went on to a Harvard MBA, how much does he know about highest of Internet technology?

Walmart now has a hip-looking team of five dozen in Silicon Valley, doing some kinda sexy Internet stuff. Could Roy sell them another fourteen thousand?

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