Thursday, January 15, 2009

What Yahoo Needs from Bartz Right Now

What Yahoo Needs from Bartz Right Now

With a new chief executive chosen from well outside its decaying orbit, Yahoo (YHOO) now has one last chance to salvage itself from a slow spiral into irrelevance. On Jan. 13, the struggling Internet icon appointed Carol Bartz, the executive chairman and former CEO of computer design software firm Autodesk (ADSK), to succeed co-founder Jerry Yang at Yahoo's helm.

In her first public statements on behalf of the company, on a brief conference call with analysts, Bartz's no-nonsense style shone through. She noted that Yahoo is a strong company that "frankly needs a little management" and said she would take some time to talk with her staff before announcing any plans for what Yahoo should do from here on out. Bartz will still have Yang's counsel in his longtime strategy-setting role as Chief Yahoo, but Yahoo President Sue Decker, who was a top internal candidate for the CEO spot, will leave the company

For her part, Bartz will need a little educating. It's not that most people question her management prowess or her drive to succeed amid huge obstacles. She joined Autodesk as CEO 14 years ago and almost immediately got a diagnosis of breast cancer, returning to work while still in recovery. She also joined a company where she wasn't exactly embraced by the engineers but managed to expand the product line so Autodesk is now a $1.5 billion enterprise, while cutting costs early in the 2001 downturn to keep the business above water.

What Is Yahoo's Niche?

Bartz, however, has no Internet or media experience, so she probably won't change Yahoo's direction on a dime. She'll not only have to figure out Yahoo's operations but also learn where Yahoo fits into a still fast-changing Internet media world. "It will likely take months for her to learn the Internet business and how Yahoo actually works before she can develop an effective new strategy," Bernstein Research analyst Jeffrey Lindsay said in a note to clients.

Observers have no shortage of ideas for what she should do next. None of this advice, it should be said, is something Bartz has asked for outside the company. Indeed, Bartz put it in no uncertain terms that she wouldn't be hurried before she had a chance to examine operations more closely. "Let's give this company some friggin' breathing room," she declared in the conference call.

But investors, advertisers, and employees won't give her unlimited time to decide Yahoo's next steps. Here are five ideas that smart folks are hoping will get Yahoo back on track once and for all. Not all of them are entirely new, but they're all more relevant than ever as Yahoo stares down restless investors, weary employees, and a declining economy that is now taking a heavy toll on Internet advertising.

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