Wednesday, January 14, 2009

New Yahoo CEO lacks Web and deal-making chops

Yahoo's (YHOO.O) new CEO is a straight-shooting, tough-talking technology veteran but she is seen lacking two qualifications investors hoped for most: deal-making savvy and Web business know-how.

Carol Bartz was appointed to the top job at Yahoo on Tuesday after a two-month search, and brings with her a strong track record of revenue growth at software company Autodesk Inc (ADSK.O), where she was chief executive from 1992 to 2006 and still remains executive chairman.

Bartz, however, does not have an established reputation as a deal-maker and Yahoo investors regarded her appointment sceptically, with shares of the Internet search and advertising company dropping more than 3 percent during the trading day.

"People respect her. She is direct and focussed, but not mean-spirited like a 'Chainsaw Al' type of person," said Needham & Co analyst Richard Davis, who covered Autodesk when Bartz was at its helm.

She is credited with increasing Autodesk's revenue from $285 million (£195.5 million) to $1.5 billion during her 14-year tenure, as well as diversifying its business. Bartz, 60, built the company by buying small and medium-sized businesses, including a $444 million buyout of Discreet Logic in 1999.

"She seems to me to be more of a builder than a buyer-and-flipper," Davis said. "I'm sure that plenty of people wanted to buy Autodesk over the years."

Analysts lauded her for being a dextrous, capable and committed executive, but said that without any experience in the Internet sector, she would likely find it daunting to turn around Yahoo, which is a distant second to Google Inc (GOOG.O) in the search advertising market.

Bartz will be under immediate pressure from investors, who have seen the value of their shares nosedive in the past year, to re-open talks with Microsoft Corp (MSFT.O) and secure a sale of the company at a healthy premium. The software maker has shown no interest in reviving its $47.5 billion takeover bid.  Continued...