Yahoo! shares rise after Bartz ouster | india | Hindustan Times
Today in New Delhi, India
Dec 11, 2016-Sunday
-°C
New Delhi
  • Humidity
    -
  • Wind
    -

Yahoo! shares rise after Bartz ouster

india Updated: Sep 08, 2011 13:50 IST

AFP
Highlight Story

Yahoo! shares rose on Wednesday following the firing of chief executive Carol Bartz and amid renewed speculation of a sale of all or part of the struggling Internet company.


Yahoo! shares gained 5.42 percent on Wall Street to close at $13.61 dollars.



In announcing Bartz’s departure on Tuesday, the chairman of Yahoo!’s board, Roy Bostock, said an Executive Leadership Council had been set up to carry out a “comprehensive strategic review” of the Sunnyvale, California-based company.



“We are committed to exploring and evaluating possibilities and opportunities that will put Yahoo! on a trajectory for growth and innovation and deliver value to shareholders,” Bostock said.



Wall Street analysts took Bostock’s comments as a sign that Yahoo!’s assets -- including its 43 percent stake in the Alibaba Group -- could be put on the block.


Yahoo! chief financial officer Timothy Morse was named interim chief executive while the board searches for a successor to Bartz, who was appointed less than three years ago to engineer a turnaround at Yahoo!



Technology blog AllThingsD reported meanwhile that Yahoo! co-founder Jerry Yang, who holds the title of Chief Yahoo! and serves on the board, told an all-hands meeting of Yahoo! employees on Wednesday that the company was “not for sale.”



Yang was replaced as chief executive by Bartz two and a half years ago after he rejected a $47 billion takeover offer from US software giant Microsoft.


Bartz significantly cut costs at Yahoo! but was faulted by investors and analysts for failing to articulate a clear strategic vision for the company on the quickly shifting Internet landscape.



Deutsche Bank analysts said the board’s statement indicated that “some sale of all or parts of the company is likely on the table.”



“A private equity buyer could seek to unlock the value of (Yahoo!’s) Asian assets and leverage up the core of Yahoo!, which continues to generate cash flow despite competitive and operational challenges,” they said.



Jefferies analysts agreed saying it was likely that Yahoo! “sells itself before a permanent CEO is announced.”



“We believe a number of strategic options could be on the table for the company, including an outright sale to a large media company like News Corp., or a more convoluted structure that would involve private equity, Microsoft, AOL and maybe even Alibaba Group,” they said.



Bartz’s troubled relations with the Alibaba Group helped contribute to her downfall.



Earlier this year, Yahoo! engaged in a public fight with the Alibaba Group over Alipay, a leading online payments platform in China.



Yahoo! notified the US Securities and Exchange Commission (SEC) in May that ownership of Alipay had been shifted to a Chinese firm owned mostly by Alibaba chief executive Jack Ma.



Yahoo! said the transfer was done without the knowledge or approval of Alibaba’s board of directors or shareholders.



Yahoo! and Alibaba reached an agreement in July over ownership of Alipay but the dispute took a toll on the confidence of investors in Bartz’s leadership.



Global Equities analyst Trip Chowdhry said firing Bartz was the “right move” but comes a “year too late.”



“Both Carol and Tim should have been fired together as they both have damaged Yahoo!’s business and repairing it will be extremely difficult,” Chowdhry said.



“Both the CEO and CFO are completely clueless of the velocity of innovation that is needed to succeed in the Internet space,” he said.



Bartz forged an Internet search and advertising partnership with Microsoft during her tenure in a bid to challenge search market leader Google but it has so far failed to deliver the hoped-for results.