October 1, 2010

Yahoo Confirms Departure Of Three Top Executives

Yahoo announced on Thursday that three of its top executives are leaving the company.

The Internet portal disclosed the departures following an earlier report on the tech Web site All Things Digital. 

In a statement, Yahoo confirmed that Hilary Schneider, an executive vice president who led Yahoo's U.S. advertising business, David Ko, a senior vice president in charge of mobile and audience, and Jimmy Pitaro, a vice president who led the division that produced the news, sports and finance sections of Yahoo's website, would be leaving the company.

"We wish them all the best in their future endeavors," the company said.

The exodus comes as Yahoo CEO Carol Bartz, known for her harsh, sometimes profane language, nears the end of her second year attempting to execute a turnaround strategy for the slumping tech company.

Yahoo's board of directors gave Bartz a four-year contract when it hired her in January 2009.

"These are some of the most important people at the company," said Standard and Poor's equity analyst Scott Kessler of the departing executives.

"It's definitely going to put more pressure on Carol Bartz," he told The Associated Press (AP).

Bartz, 62, has been slashing costs while trying to attract more people to Yahoo's website amid fierce competition from rapidly growing online social networking sites such as Facebook and Twitter.

In farming out the majority of Yahoo's search technology to Microsoft Corp.'s Bing, Bartz has also abandoned any chance of matching Google Inc. in the lucrative Internet search market.

Although analysts have praised Bartz for bringing more discipline to Yahoo, her turnaround strategy has produced disappointing results.  

Advertisers are still spending more money with Google and Facebook, leaving Yahoo in the same financial quagmire that began under former CEO Terry Semel and company co-founder Jerry Yang.

Yahoo's stock price has dropped about 15 percent this year, and now trades below the $33 per share that Microsoft offered to acquire the entire company in May 2008.

Yang had balked at the bid, prompting Microsoft to withdraw the offer.

Shares of Yahoo's stock were down 17 cents on Thursday, closing at $14.17.

Bartz has said it could take several years to revive Yahoo, and emphasized that Apple Inc. didn't become a Wall Street favorite when Steve Jobs first returned to the company in 1997.

Given that Bartz has been unable to stop the exodus of talent that began under Semel and Yang, the departures announced on Thursday could prompt some board members to rethink their decision to hire Bartz, Kessler said.

"This will increase the wattage of the spotlight on that issue."

Yahoo said it hopes to fill Schneider's position by the end of the year, and has persuaded her to stay on while the company searches for her replacement.

Raymond Stern, who joined Yahoo last year as senior vice president of North America partnerships, will succeed Ko.

Yahoo did not disclose who would replace Pitaro.


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