Carol Bartz & Yahoo One Year Later

I wrote this post slightly more than a year ago, roughly six weeks after Carol Bartz assumed command at Yahoo. In it, I expressed hope that Carol Bartz could turn the troubled company around, and noted approvingly how she began her tenure at the firm's helm.

In July of last year, I wrote this post concerning Bartz' Yahoo tie-up with Microsoft. Looking at my posts as last year progressed, I confess to seeing myself having become more doubtful and much less enthusiastic regarding Bartz' ability to salvage the badly-damaged internet pioneer.

The nearby price chart of Yahoo and the S&P500 Index tells a disappointing story. Roughly since Bartz' arrival at Yahoo, it has trailed the index returns, roughly 19% vs. 50%.

Yesterday's 30 minute interview has, sadly, increased my scepticism about anyone's, even Carol Bartz' ability to fix Yahoo. Bartz' comments and answers to questions were vague, non-quantitative and, I believe, wishful thinking. She didn't do a good job answering Dennis Kneale's simple question about what Yahoo stands for. Yes, information, but that's old and hardly unique.

In fairness, the nearby price chart for the company and S&P500 Index over 5 years shows that the firm has been struggling for quite some time.

But after a year, having read and listened to Carol Bartz' statements as to how she would turn Yahoo around, I must admit that there's nothing new in her promises or assessments that weren't there a year ago.

Sadly, she stooped to taking an easy way out, when offered it, and complaining that the firm's equity isn't appropriately priced. That it's too cheap, and should be higher.

Uh huh.

When you're hearing that, you know the CEO is out of ammo and just desperate.

I don't hold this against Bartz. It's understandable that she was ready for a change, having successfully led AutoDesk for well over a decade. How could she resist such a train wreck as Yahoo?

Much like CEOs like Lou Gerstner at IBM decades ago, it must have seemed that she couldn't lose. If she failed, it would be viewed as having been an impossible task. If Bartz succeeds in rebuilding market value for Yahoo, she's a hero.

It's looking like it's the former. Yahoo's total returns are less than you'd get in the diversified S&P, and Bartz is offering no explanation of what will change in the near future to make that different.

To me, it does really demonstrate that the massive damage Yahoo suffered under Terry Semel and then, again, Jerry Yang, has been too much for even Bartz to reverse.