Carol Bartz Pushes Back!

In this post about Yahoo from just over two years ago, I wrote,

"As I discussed this with my business partner, it became clear what Yahoo's continuing vulnerability is. He described what he thinks Semel's vision of Yahoo is as 'a place to form groups,' or 'a place users go to find groups and information.' The trouble with this is that it is, for the most part, free. I have never paid a dime for any Yahoo service, although I use their portfolio tracking Finance page for my daily portfolio performance monitoring.

What I think Yahoo should have done, back in 2001, is to have immediately retained a few senior consulting partners from McKinsey and Bain to provide the Yahoo senior managers with anecdotal evidence of how other companies survived and prospered in highly-competitive, technologically-oriented business situations, when they had no clear, salient competitive advantage.

My own opinion is that Yahoo should have begun to take the things it is good at, such as information redistribution, presentation, and online groups management, and offered to private-label them to various companies which need these services, but can't get adequate results from their internal IT departments. Online brokerage services came to mind, as my partner and I discussed this. He and I both deplore Schwab's useless online portfolio performance reporting and "analysis," if you can call it that. Why didn't Yahoo provide them with a portal directly taking the Schwab customer to a Yahoo-provided, but Schwab-labeled customizable portfolio performance site/page? Or provide online retail companies with customer group-management facilities cloned from the very large, successful, but free Yahoo Groups offerings?

Such a strategy would cement Yahoo into corporate marketing and customer service functions, while, for once, actually getting paid by someone for what they do. I maintain that, with its largely free services for consumers, Yahoo continues to be the "used car" of internet information providers. It's got no software, hardware, superior search engine, or actual proprietary information for which to charge fees. Thus, I believe its hold on consumer loyalty is tenuous, at best."

In an interview on CNBC Thursday morning, Carol Bartz repeated, almost verbatim, my partner's description of Yahoo as a place users go to find groups and/or information. Only, as Bartz said it, it sounded a lot more promising.

Her attitude during the interview was both combative of some rather condescending questions from the interviewer, Jim Goldman, and dismissive of Google as an online giant with different strengths- search- in a different sphere.

Bartz didn't explain how she's going to get Yahoo to finally monetize its core strengths, but at least she can articulate some focus, and you know she understands the financial necessities facing Yahoo.

Just viewing the nearby price chart of Yahoo and the S&P500 Index shows that, shortly after Bartz' arrival at the company, investors have begun to return, too. The company's equity price has outpaced the index's since early January, rising some 20%, while the index has remained flat.

It's very refreshing to see her speak positively about Yahoo's capabilities and potential in a more informed way than I ever heard Jerry Yang or Terry Semel express themselves.