New Yahoo CEO Tim Morse Could Destroy the Company

After CEO Carol Bartz was fired over the phone on Tuesday, a new Yahoo CEO will temporarily take over until a permanent replacement is appointed. Yahoo Chief Financial Officer Tim Morse has now been promoted to interim CEO. He will be performing both CFO and CEO functions with the help of the company's Executive Leadership Council. He'll also have support and guidance from Yahoo co-founders David Filo and Jerry Yang.

Investors expressed approval of the decision, and Yahoo shares surged 6 percent in afterhours trading. However, business analysts aren't so optimistic about the success prospects for the new Yahoo CEO. While firing Carol Bartz has received unanimous approval, analysts believe that Tim Morse should have been canned as well. In a statement to investment clients regarding Yahoo's Bartz and Morse, Global Equities Research analyst Trip Chowdhry said, "They both have damaged Yahoo's business, and repairing it will be extremely difficult."

While serving as Yahoo's CFO, Morse had a record for making decisions based on cost-cutting measures, not asset development or innovation. In addition, the new Yahoo CEO has exhibited an inability to move forward at the pace required in the Web 2.0 environment. In his tenure as Yahoo CFO, Morse worked with Bartz on features that never resulted in significant revenue growth. Further, their timeline for development of new products and features is often years, while competitors like Google and Facebook work on a timeframe that is a fraction of that.

In order for Yahoo to successfully move forward, Morse will have to be replaced with a talented and visionary CEO as soon as possible. A major concern is that a CFO, by definition, is an officer of a company from a financial perspective, not an overall organizational one. Analysts are skeptical of Yahoo's ability to attract top talent, so Morse may be in the CEO position long enough to do even more damage to Yahoo's future.

Comments: 8

mmerlinn ?. Sep 8, 2011, 6:02am UTC

More companies have been destroyed by beancounters than from any other cause.

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Nippy Katz (Not his real name) Demigod about Town Sep 9, 2011, 7:30pm UTC

It's difficult to see how Morse could do much worse than the pre-Bartz management. Anything is possible.

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August Lady Sep 9, 2011, 7:38pm UTC

Bartz got about a $10 million severance package~not bad for being fired!!!

Jamaica Winship Sep 9, 2011, 10:44pm UTC

$10 million severance package?!?! Wow!!

Debbie W. Sep 9, 2011, 10:47pm UTC

Poor Bartz, only $10M? Boo-hoo! I'm sure she will go on to another company and do some damage there and get another outrageous severance!

August Lady Sep 9, 2011, 11:21pm UTC

Yeah, $3 mil to get rid of her, close to $7 mil in stock options, etc~it was on our local news.

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Angela M. Sep 10, 2011, 2:17pm UTC

Only time will tell...

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Nippy Katz (Not his real name) Demigod about Town Sep 10, 2011, 2:59pm UTC

This is a good example of the limited ability of CEOs to improve the performance of a company on the skids. Bartz had a long and successful term at Autodesk, which had a great product when she took over but needed some operational tweaking since John Walker was mainly interested in software development. She came into a horrible situation at Yahoo and it didn't improve. The rule of thumb for CEOs is similar to that for baseball managers. There is no way a CEO or a new manager can improve a truly bad situation. Yahoo will probably change management a few more times unless it goes bankrupt under the new management group.

It's magical thinking at its finest.

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New Yahoo CEO Tim Morse Could Destroy the Company

Comments: 8

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