“I am very sad to tell you that I’ve just been fired over the phone by Yahoo’s chairman of the board. It has been my pleasure to work with all of you and I wish you only the best going forward,” Carol Bartz wrote to Yahoo staff on Tuesday night to inform them of her sudden departure as chief executive.
While Bartz’s contract still had 16 months left to run, which suggests she will leave with generous severance pay, her exit has not come as a surprise to Silicon Valley insiders.
According to comScore, the online measurement company, traffic to Yahoo has dropped by 33 per cent since Bartz’s arrival at the helm two and a half years ago. The company’s share price has remained flat over the same period, while the Nasdaq index of tech shares has risen about 60 per cent.
Forbes and other US media have widely reported that Bartz’s relationship with Jack Ma, chief executive of Alibaba, has been less than cordial. Yahoo has a 43 per cent stake in the Chinese internet company, whose market cap is HK$40.64bn ($5.2bn).
Earlier this year in an interview with AllThingsD, the online social media news site, Kara Swisher asked Ma if he would like to buy Yahoo. He replied: “I would love to, if someone would lend me the money. Buying things is fine, but making things is more fun.”
For all the challenges, Yahoo’s problems predate Bartz’s arrival in January 2009 as the company’s third chief executive in three years. Challenges from Google, the dominant player in search, and increasing pressure from Facebook were already hurting Yahoo.
As the company brings in the suits and starts a strategic review, it will be interesting to see who takes the hot seat next.
Meanwhile, Sallie Krawcheck’s departure from Bank of America is much more surprising. Arguably the most powerful woman on Wall Street, she is one of a number of victims following “delayering” efforts by Brian Moynihan, the chief executive, to stay the declining fortunes of the beleaguered bank.
Krawcheck was in charge of the largest wealth management business in the world with about $2,300bn in assets. She managed both Merrill Lynch and US Trust for the group with an army of 16,000 financial advisers.
Her role was structured away, leaving her little option but to quit as it meant an effective demotion, no longer reporting to the chief executive but to David Darnell, who has been appointed to one of the two newly created chief operating officer positions.
“I am pleased with the work the team has done, in particular the strong performance of the business,” said Krawcheck in a statement. “It has been an honour to lead Bank of America Global Wealth and Investment Management during a challenging time.”
During her two years at BoA, the wealth management division has contributed more than $5bn in profits to the bank. This should be set against the background of the bank’s share price, which has suffered a 48 per cent decline since the beginning of the year.
John Carey, writing for CNBC, reports a number of the bank’s insiders’ views that Krawcheck has perhaps been a victim of her own success, presenting the board with an obvious replacement for Moynihan. “With her gone, his job is safer,” Carey quoted an executive as saying.
A relative youngster at 46, Krawcheck is unlikely to be short of offers. Her short time at BoA followed executive roles at Citigroup and Sanford Bernstein, the sell-side research firm.