When Yahoo's new CEO Carol Bartz met with company Chief Financial Officer Blake Jorgensen nearly two weeks ago, she delivered him a pink slip, sources said.
And while Bartz has not given any indications of a front-runner CFO replacement, the expectation is it will be a candidate from the outside and, hopefully, soon, said sources familiar with Yahoo's thinking.
"The CFO position will be her decision to make, not the board's. She'll have an opportunity to build her own management team," said one source.
Microsoft, meanwhile, does not expect Yahoo's CFO search, nor the time it will take for a new CFO to become familiar with the company, to slow down any potential of landing a search deal with the Internet pioneer, said one high-level Microsoft source.
After all, in the last go-around when Microsoft announced its , it was Yahoo's treasurer who was actively engaged in day-to-day discussions, not Jorgensen or Yahoo's then-president, Sue Decker, said the source.
"I thought it was a little out of the ordinary, but not unheard of," said the source, adding, "Yahoo's treasurer was the one who had their hands all around Yahoo's business and their numbers."
Such an arrangement made sense, noted another source, given Jorgensen, who , was there for only seven months when Microsoft made an unsolicited offer to buy the company.
Yahoo's treasurer is part of the corporate finance team that Decker created when she was Yahoo's CFO. The corporate finance team, as with other large companies, is responsible for building financial models to assess valuations and methods of payment for deals and mergers and acquisitions, which Yahoo's corporate business development team may consider, the source said.
As a result, whether Yahoo has a new CFO in place, the company can still move forward in vetting any deal that Microsoft may want to put forward. The treasurer, Ron Will, is still in place, despite the restructuring announced Thursday, a company spokesman said.
It makes sense that Bartz would look at swapping out Jorgensen for someone who she will self-select, said Umesh Ramakrishnan, vice chairman of executive search firm CTPartners.
"Given the fact that Yahoo continues to be under pressure from Microsoft, it shows that the financial aspects of Yahoo are just as important as the products," Ramakrishnan said.
Although Microsoft is interested in a search deal with Yahoo, the two companies are not engaged in any active conversations, said the Microsoft source.
"If an effort is accelerated to engage in talks, it will be because of the CEO, not the CFO," the source added.
After nearly a decade at Yahoo, President Sue Decker is bowing out to make way for new Chief Executive Carol Bartz--after helping her new boss through a transition period. Here's the full text of the memo she sent to Yahoo staff--plus a Yahoo photo of her appearance with Bartz during Wednesday's all-hands meeting with the company's new leader.
From: Sue Decker
Sent: Tuesday, January 13, 2009 2:32 PM
To: all employees
Subject: The next chapter
Yahoos
After almost nine incredibly rewarding years with this terrific company, I have decided that it is time for me to pursue my next chapter, just as Yahoo! is charting the next phase of its path-breaking journey.
I have not made this decision lightly. I have been with this company for nearly a decade, and together we have been through a period of amazing change during this time. In particular, I want to thank the Board and especially Jerry, who has been my partner and friend from the very beginning, for affording me the opportunity to contribute to Yahoo!'s success.
The Yahoo! of today is a radically different company than the one I joined in 2000, as befits a major franchise in one of the world's fastest-evolving industries. Financially, the company has grown its revenue base from a little over $1 billion in 2000 to more than $7 billion, and has more than quadrupled its operating cash flow from around $400 million to close to $2 billion. Over that period, working together, we have reshaped one of the world's most vital Internet brands and transformed the company in ways the outside world is only just beginning to see. We did this by anticipating customer needs and evolving our business model ahead of dynamic changes to the online marketplace. While it is true that competition has never been fiercer, it is equally true that Yahoo! has moved decisively and creatively forward.
I am especially proud of some of the innovative open and customizable products and platforms we have developed in the last 18 months, including:
The APT display platform, which has the potential to transform the way display advertising is bought and sold
• BOSS (Build your own search service), which lets others use our search technology through open API's
• The host of mobile and device platforms and services which are fundamentally changing the way consumers experience the internet on devices beyond the PC
• Our new Home Page, which will launch early in 2009, and will be open to 3rd party content and help Yahoo! lean into its greatest strength: understanding consumers
We also faced the difficult decision of reducing costs in a way that has allowed us to hit our profitability objectives, notwithstanding the tough economy. Not too many companies can say that. The result of all of this hard work is a company which has positioned itself to weather a challenging economic cycle and come out the other side stronger than before.
But the real testament to the success this company has achieved is you. You are the best in the business - tremendously talented, highly skilled and incredibly dedicated to making Yahoo! stronger for our users and advertisers. Even through a turbulent 2008 and in the face of unrelenting distractions, you held your heads high and stayed focused, releasing some amazing new products for users and experiences for advertisers that demonstrate your tremendous insight, energy and passion. It has been my great pleasure working with all of you, and I have every confidence that going forward you will continue to drive Yahoo! ahead and to prosper.
As I turn my attention to helping transition in the most successful way possible, I want to congratulate Carol on her new role and put my full support behind her. I would ask that you all do the same. She and I serve together on the Intel board, so I have had the pleasure of seeing her in action. She is a decisive, passionate leader that I believe will serve Yahoo! well as it embarks on the next phase of its evolution.
I am extremely grateful for the time I have had at Yahoo! This has been a profoundly enriching experience for me, both personally and professionally. As I set off on for my next mission, I want to extend my sincerest wishes to all of you for continued success.
Sue
Yahoo CEO Carol Bartz
(Credit: Autodesk)Carol Bartz, Autodesk's former executive chairman, has replaced Jerry Yang as Yahoo's chief executive.
"She is the exact combination of seasoned technology executive and savvy leader that the board was looking for, and we are thrilled to have attracted such a world-class talent to Yahoo," Yahoo Chairman Roy Bostock said in a statement Tuesday. "The board is united in its view that her energetic and decisive leadership style, coupled with a proven track record of driving growth, operational excellence and shareholder value, is exactly what Yahoo needs to get back on a path toward achieving its full potential."
Bartz, 60, spent 14 years as Autodesk's CEO before becoming executive chairman in 2006. At Yahoo, Bartz's challenges will include adapting from a successful but relatively unknown software company to a struggling media company whose Internet properties used by hundreds of millions of people.
In addition, Yahoo announced the departure of President Susan Decker.
"The Board thanks Sue for her service as President, the important contributions she has made to Yahoo!'s development in a variety of roles over the past 8-1/2 years, and her willingness to work with Carol Bartz to ensure a smooth transition. We respect her decision to move on to other challenges and wish her only the best," Bostock said in a statement.
Stay tuned to this post for more details as they come from a news conference at 2:30 p.m. PST. We'll be live-blogging the event. ... Read more
This post was updated at 1:39 p.m. PST with Yahoo declining to comment.
Yahoo may have fallen out of favor with Wall Street after the failed Microsoft buyout bid, but that doesn't mean you can count Yahoo President Sue Decker out of the running for CEO, people familiar with executive search say.
(Credit:
Yahoo)
Decker has undergone two full rounds of in-depth interviews with Yahoo's board, according to sources.
And, in executive recruiting circles, more than one in-depth interview with an internal candidate signals a strong contender, said David Nosal, CEO of executive recruiting firm Nosal Partners.
"If she has gone through two rounds of full interviews with the board, it sends the signal that she is being given strong consideration," Nosal said. "Rarely do boards go through a second round of full interviews, unless there is something significant they see there, whether it's for an internal or external candidate."
A number of industry players and major Yahoo investors had discounted Decker as a viable CEO candidate for the struggling Internet search pioneer, following Microsoft's failed buyout bid of $33 a share for the company. Yahoo, which had traded at roughly $19 a share before the initial bid became public last January, closed Wednesday at $12.71 a share.
But one source familiar with the search noted: "She has always been a strong candidate."
And at least one influential Microsoft source noted that Decker is well regarded at the software giant, even though the companies weren't able to strike a buyout, or partial deal for just the search business.
For Yahoo, naming Decker as CEO could potentially bode well for its efforts to quickly reignite talks with Microsoft, given that an outside hire would need time to analyze the different aspects of Yahoo's businesses before holding discussions to potentially sell off parts of the company.
Meanwhile, strong outside candidates have reportedly included former Vodafone CEO Arun Sarin, whose expertise with the carrier could have come in handy in righting Yahoo's failed effort to win the Verizon search business. Sarin is reportedly no longer interested in the Yahoo CEO gig.
And an All Things Digital post Wednesday notes Autodesk CEO Carol Bartz is another serious contender for the post.
Although sources familiar with the search say there is no deadline for naming a CEO and that it's hoped one could be selected by the end of the quarter, executive recruiters say there is an artificial deadline.
"A search of this magnitude you can never rush, but since it's one of the most high-profile CEO searches, there are any number of people who have made it be known in, or outside, the U.S. that they are interested in the job. I would imagine that Yahoo would be into its second or even third round of interviews with a short list of candidates," Nosal said.
He added he would be "surprised, if not disappointed," if Yahoo does not name a CEO within the next 30 to 45 days.
Executive recruiter Jon Holman of the Holman Group noted that if a CEO is not found within a four-month period after launching a search, the process "begins to grow hair."
"If six months go by, you know that the board has seen a bunch of people and you begin to think that the board doesn't know what it wants, or the board is looking for a Superman that doesn't exist, or no one wants the job," Holman said. "All those alternatives are bad. You don't want the company to look like damaged goods."
Yahoo announced on November 17 that its founder and CEO Jerry Yang would step down and resume the role of chief Yahoo once a new CEO was selected. In the meantime, Yahoo is nearing its two-month mark in its search.
Yahoo declined to comment on Decker and the CEO search.
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