Bartz Talks Yahoo’s Execution Challenge

Yahoo CEO Carol Bartz
Yahoo CEO Carol Bartz
Source: Yahoo

A big technology company hires a new CEO from another industry and is immediately blasted for not having the vision to keep it competitive and pursue the right kind of innovation.

That might describe Carol Bartz’ surprise appointment to Yahoo’s top spot in January, but it also describes Lou Gerstner, the former CEO of Nabisco who was named CEO of IBM in 1993 — and has since been credited with turning Big Blue around. A Yahoo (NASDAQ: YHOO) shareholder made the comparison at the company’s shareholder’s meeting today, recalling that Gerstner had been “vilified” for not expressing a vision for the company.

Bartz, in her usual no-nonsense manner, made it clear she doesn’t think she, or Yahoo as a company, has a vision problem.

“We already have our vision — we know what we’re doing,” Bartz said. “If we could double our audience, advertisers would flock to us. It’s about growth. The vision is there. We have an execution problem.”

IDC analyst Karsten Weide agreed.

“Yahoo’s issues are operational and she’s the perfect person to address those,” Weide told “But anything she does is going to take a couple of years to pay off. Do shareholders have the patience? I hope they do, because I think she’s on the right track.”

That said, Weide also thinks Yahoo shouldn’t do a deal with Microsoft (NASDAQ: MSFT), which has made repeated overtures to buy or outsource its rival’s search business.

“I maintain that would be a big mistake,” said Weide. “Yahoo can’t improve its financial performance without owning search.”

For the most part, during her prepared remarks and in a Q&A session at today’s shareholder meeting, Bartz remained bullish on Yahoo’s prospects.

She also revealed that co-founder Jerry Yang first approached her about taking the CEO spot during a break at a board of directors meeting at Cisco (NASDAQ: CSCO), on which they both served. It’s an interesting piece bit of trivia, since Yahoo publicly stated it had hired an executive search firm to fill the spot.

Run Yahoo? You’ve got to be kidding

“Jerry leaned over and asked, ‘Would you be interested in running Yahoo?'” Bartz said. “I said, ‘You’ve got to be kidding. Surely there are other people out there at Time Warner, and elsewhere.'”

So, no deal — for the moment. Two months later, Bartz said she met at Yang’s house for a glass of wine and reiterated that she didn’t want the Yahoo CEO job.

“I left an hour later fully hooked,” she recalled.

Bartz said what really intrigued her was when Yang drew up the company’s organizational chart.

“I looked at that and realized I can help,” Bartz said. “It was confusing and, more than likely, was causing the company to lose its speed, which is what Internet companies rely on.”

Since coming on board, Bartz has overhauled the management structure and overseen layoffs. Yahoo has also ramped up its “open” strategy, making more of its infrastructure available to developers through initiatives like BOSS (Build Your Own Search Service) and Search Monkey.

Questions on China and Britney Spears

Bartz took other shareholder questions head-on.

A representative from Amnesty International complained about Yahoo’s record in China and seeming unwillingness to confront the Chinese government on providing unfettered access to Web content.

[cob:Special_Report]”I’m going to go real simple here,” Bartz said. “Yahoo was not incorporated to fix China — it was incorporated to give people a free flow of information. Ten years ago, the company made a mistake and you can’t hold us up as the bad boy forever. We’ve worked harder. It’s not our job to fix the Chinese government. It’s that simple. We will respect human rights, but not take on every government in the world — that’s not our mandate.”

Another shareholder complained that there was too much fluff and Hollywood-related gossip on Yahoo’s home page. “I’m sick of seeing the guy with the eight kids,” said the shareholder, referring to the ongoing saga of the reality TV show Jon and Kate Plus Eight. “Please stop dumbing down the home — we can use CNN, we can handle it.”

Bartz went one better. “I’m the same way. If I see another Britney Spears thing, I’m going to throw up,” she said.

Yahoo is working on ways to make it easier for users to customize the home page. She mentioned a “fluff-o-meter” that would help users see more hard news or a mix of hard news and lighter fare, if that’s their preference.

“We’re looking at that on all our properties, where we’d ask you a question now and again so we don’t bug you with stuff you don’t like,” she said.

News Around the Web