After only eight days at the helm of Yahoo, new CEO Carol Bartz showed her no-nonsense style by addressing two controversial issues right away in a conference call with analysts:
“Did I come to Yahoo to sell it? No. I see a tremendous collection of assets that I see will help make us stronger,” she said.
And secondly:
“Will we immediately sell our search business? I did not arrive with any preconceived notions,” she said.
Tuesday’s conference call followed Yahoo’s (NASDAQ: YHOO) release of quarterly earnings, in which the Web giant reported a net loss of $303 million in the fourth quarter, or 22 cents per share.
The results were down from net income of $206 million, or 15 cents per share, in the same period last year, but absent one-time charges of about $603 million, Yahoo (NASDAQ: YHOO) would have posted profits ahead of analysts’ consensus of 13 cents, which gave Bartz and Chief Financial Officer Blake Jorgenson a positive base to begin the discussion.
Jorgenson said Yahoo has benefited from ad buyers consolidating their purchases to major, established sites. He also noted page views were up 14 percent for Q4 at Yahoo, where users continue to spend more time online than anywhere else on the Web, according to Comscore.
Bartz emphasized the value of search to Yahoo’s overall business and noted the company’s ongoing efforts to introduce new features and capabilities. “Our share remains over three times the size of the number three player [Microsoft],” she said.
While Microsoft (NASDAQ: MSFT) backed off its offer to buy Yahoo months ago, the software giant has continued to express interest in buying Yahoo’s search business. Bartz did not completely dispel the idea of selling it, but she made clear it’s a very valuable and integral part of Yahoo’s business.
IDC analyst Karsten Weide said he was glad to hear Bartz isn’t planning, at least for now, to sell the search part of Yahoo. “If you want to be successful you can’t outsource search and cross your fingers,” Weide told InternetNews.com.
Any such deal with Microsoft would likely involve outsourcing search capability back from Microsoft. Weide said there’s a big push towards performance marketing which helps advertisers better identify where their leads are coming from and which ads are effective. “You need to collect user data and leverage that. In my book, if Yahoo outsourced search it would be conceding defeat.”
Bartz also said she was excited about Yahoo’s APT platform designed to make ad sales more efficient, and other recent releases that show promise.
Waiting to exhale
Gartner analyst Allen Weiner said the conference call was more significant as a coming out party for Bartz than as a follow up to the earnings results.
“I thought she did pretty well,” Weiner told InternetNews.com. “She said enough to show she has some insight into what’s not working right at the company and her ability to fix it.”
In that regard, Weiner said Bartz should get the “breathing room” she asked for the day her appointment was announced. Yahoo reported having $3.5 billion in cash and securities. “Bartz doesn’t have to worry about Yahoo going out of business, she has a clean slate,” said Weiner.
Since her appointment, Bartz has been dogged by criticism she doesn’t have experience running an Internet company. But Weide applauds her appointment. “Granted, she’s not a media person that knows about running a Web site, but she’s very strong on operations, whacking the table and getting things done,” he said. “Yahoo needs more of that energy at the top. I think she’s just what the doctor ordered.”
During the Q&A session, Bartz said Yahoo was a “very complex” organization that makes it hard for staff to get the speedy answers they need to make decisions. “That’s fairly easy to fix,” said Bartz, the former CEO of Autodesk. “They need better lines of communication and that’s something I happen be pretty good at.”
On the sales front, Bartz said she’s met with the company’s sales execs and been very impressed. “They’re sharp, focused and understand their business,” she said. In a few weeks, Bartz said she’ll attend one of Yahoo’s big sales meeting and looks forward to meeting with the sales staff “and have a beer with them. That’s the best way to get to know them.”
