What is Yahoo? Bartz spells it out in four-letter words

The chief executive of Yahoo has launched a four-letter tirade against an interviewer after being challenged over whether she had a clear vision for the company. Carol Bartz, who took over the internet giant at the start of last year, lashed out by saying: “I don’t want to hear any crap about something magical that the fine people of Yahoo are supposed to do in a short period of time.”

Ms Bartz was having what was billed as a “fireside chat” with Silicon Valley blogger Michael Arrington, at the TechCrunch Disrupt conference in New York, but it was the chief executive herself who burst into flames after repeatedly being asked about the increasing competition the company faces from Apple.

She had been in the post 16 months, she said, “and I’m supposed to have an iPad and an iPod and an iEurghh? Come on”. It was three years after Steve Jobs returned to Apple before the company launched the iPod, she said, and seven years until he was able to boast share price gains. “So fuck off. And that one I meant.”

The explosive confrontation, in front of an audience of technology entrepreneurs and writers and streamed live on the internet, came on the day Yahoo announced it was giving up two more of its traditional activities: online maps and internet matchmaking. Tomorrow, Ms Bartz is scheduled to present Yahoo’s latest vision for the future to Wall Street analysts and investors.

Since taking the helm last January, she has shed jobs and outsourced online services that Yahoo used to put at the centre of its business, but there are growing concerns about whether the 15-year-old company can find ways to claw back market share from new generations of online rivals.

Ms Bartz, an experienced technology executive known for her no-nonsense style, was feted as a decisive and iconoclastic appointment when she joined Yahoo from the software company Autodesk last year. Yahoo had previously fought off a takeover attempt from Microsoft, only to see its share price plunge as the advertising recession worsened and investors worried about its strategic future.

“The hiring of Carol Bartz was a surprise move going with more veteran leadership,” Brian Bolan, analyst at Olympia, told clients recently. “Early on her energy and shake-up were welcome changes, but a brain drain of talent leaving for start-ups and competitors has made us question the decision. A few months ago, Ms Bartz was on a media blitz after completing a year as chief executive, but still had troubles in describing what Yahoo does and what the plan for the future was. Our concerns with top management are that Yahoo may be trying to be too much to too many instead of focusing on core competencies.”

Where once the company’s main websites were a gateway to the internet for millions of internet users, the digital landscape has shifted under Yahoo’s feet. Its news sites, email and instant messaging services are still wildly popular, but it has lost market share in the era of social networking to newcomers such as Facebook. The online audience is fragmenting among burgeoning numbers of specialist sites. And, most damagingly, Google has usurped its status as the dominant search engine and pushed Yahoo into a poor second place when it comes to making money from search-related adverts.

One of Ms Bartz’s first decisions was to outsource the bulk of its search business to Microsoft last year. Instead, she is focusing on making money from display advertising – the banner ads and videos that pop up on its websites and those throughout a network of affiliates – and on improving the content on Yahoo’s internet and mobile internet sites that it does decide to produce in-house. The company says its vision is to be “the centre of people’s online lives” and to focus on “providing the best experiences for our users and advertisers”.

No question, it remains big. It says hundreds of millions of internet users come to Yahoo properties every month. It had revenues of $1.6bn (£1.1bn) in the first three months of 2010. There are twice as many Yahoo email users as there are people in Mexico, it boasts.

But the question of how Yahoo might maintain – let alone grow – that audience is of pivotal concern to Wall Street as it gathers for the investor day tomorrow. Developments yesterday showed Ms Bartz once again shedding activities that were not working out. The company said it would outsource its Yahoo Personals dating service to Match.com, which has more users. And it announced a partnership deal with Nokia, the phone handset maker, which would replace Yahoo Maps with the Navteq mapping service that Nokia acquired in 2007. Navteq maps will appear across all Yahoo’s online sites and mobile applications. In return, Nokia’s internet-enabled phones will use Yahoo chat and email as their default applications.

“We were definitely behind in maps, as I stated last year,” Ms Bartz said at a press conference with Nokia’s chief executive, Olli-Pekka Kallasvuo. Google Maps is the world’s most famous mapping service, and Yahoo’s disadvantage in this area threatened to hobble attempts to build a new generation of location-based services for mobile handsets, on which tech companies are hoping to sell lucrative local adverts. “We have not put enough engineering resources behind it, probably starting three years ago, but by buying Navteq, Nokia has put its money where its mouth is,” she said.

At the press conference, in another sign of irritation, Ms Bartz said that Yahoo services are used by 41 million people over their mobile phones. “It is easy to think that everybody uses Google this and Google that, when in fact half of them use our services.”

As Larry Witt, an analyst at Morningstar, puts it: “Yahoo remains one of the most heavily trafficked sites in the world. In the early days of the internet, its strategy was simple – attract as many users as possible and sell display ads. This strategy was largely successful, as the firm developed a number of highly trafficked sites, including Yahoo Finance, Yahoo News, and Yahoo Sports, while revenue growth (including acquisitions) averaged 55 per cent annually from 2001 to 2006.

“However, the company faces long-term challenges. We think audience fragmentation will continue, and Yahoo will struggle to increase its user base. Also, Yahoo has lost key personnel over the past several quarters, which we believe will lead to inferior products and sales operations. For these reasons, we project revenue growth to average just 5 per cent through 2014, despite an industry with secular tailwinds.”

Sceptical investors will want more tomorrow than boasts about current size, they will want concrete plans for how Yahoo will grow in the future. This was the thrust of Mr Arrington’s provocative questioning at TechCrunch Disrupt; similar questions will be asked from the analyst community. How will Ms Bartz answer? And will she be civil?

Suggested Topics
PROMOTED VIDEO
Life and Style
Could you tell the difference between this and an organic alternative?
food + drink

Culinary experts in The Netherlands thought it was 'fresh' and 'tasty'

Life and Style
Six of the 76 Goats' cheese samples contained a significant amount of sheep's cheese
food + drink
News
Russell Brand arriving for the book launch in East London
peopleRussell Brand cancels his book launch debate due to concerns about the make-up of the panel
Arts and Entertainment
JK Rowling will not be releasing a 'romance' novel anytime soon
books
Arts and Entertainment
Contestants during this summer's Celebrity Big Brother grand finale
tvBroadcaster attempts to change its image following sale to US
Life and Style
tech

Of all the computers Apple has ever made there’s only one that Steve Jobs had to sell his car to finance

News
ebooksAn unforgettable anthology of contemporary reportage
Arts and Entertainment
Sarah Dales attempts to sell British Breeze in the luxury scent task
tvReview: 'Apprentice' candidates on the verge of tears as they were ejected from the boardroom
News
One of the 'princesses' in the video
videoYouTube reinstates sweary video after takedown for 'violating terms'
News
Call me Superman: one of many unusual names chosen by Chinese students
newsChinese state TV offers advice for citizens picking a Western moniker
Arts and Entertainment
film

Marvel has released first teaser trailer week early after it leaked online

Arts and Entertainment
Awesome foursome: Sam Smith shows off his awards
music22-year-old confirms he is 2014’s breakout British music success
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

IT Systems Business Analyst - Watford - £28k + bonus + benefits

£24000 - £28000 per annum + bonus & benefits: Ashdown Group: IT Business Syste...

Trainee Recruitment Consultant - Birmingham - Real Staffing

£18000 - £23000 per annum + Commission: SThree: The SThree group is a world le...

Trainee Recruitment Consultant Birmingham

£18000 - £23000 per annum + Comission: SThree: The SThree group is a world lea...

Trainee Recruitment Consultants

£20000 - £25000 per annum + OTE £Competitive: SThree: SThree Group and have be...

Day In a Page

How could three tourists have been battered within an inch of their lives by a burglar in a plush London hotel?

A crime that reveals London's dark heart

How could three tourists have been battered within an inch of their lives by a burglar in a plush London hotel?
Meet 'Porridge' and 'Vampire': Chinese state TV is offering advice for citizens picking a Western moniker

Lost in translation: Western monikers

Chinese state TV is offering advice for citizens picking a Western moniker. Simon Usborne, who met a 'Porridge' and a 'Vampire' while in China, can see the problem
Handy hacks that make life easier: New book reveals how to rid your inbox of spam, protect your passwords and amplify your iPhone

Handy hacks that make life easier

New book reveals how to rid your email inbox of spam, protect your passwords and amplify your iPhone with a loo-roll
KidZania lets children try their hands at being a firefighter, doctor or factory worker for the day

KidZania: It's a small world

The new 'educational entertainment experience' in London's Shepherd's Bush will allow children to try out the jobs that are usually undertaken by adults, including firefighter, doctor or factory worker
Renée Zellweger's real crime has been to age in an industry that prizes women's youth over humanity

'Renée Zellweger's real crime was to age'

The actress's altered appearance raised eyebrows at Elle's Women in Hollywood awards on Monday
From Cinderella to The Jungle Book, Disney plans live-action remakes of animated classics

Disney plans live-action remakes of animated classics

From Cinderella to The Jungle Book, Patrick Grafton-Green wonders if they can ever recapture the old magic
Thousands of teenagers to visit battlefields of the First World War in new Government scheme

Pupils to visit First World War battlefields

A new Government scheme aims to bring the the horrors of the conflict to life over the next five years
The 10 best smartphone accessories

Make the most of your mobile: 10 best smartphone accessories

Try these add-ons for everything from secret charging to making sure you never lose your keys again
Mario Balotelli substituted at half-time against Real Madrid: Was this shirt swapping the real reason?

Liverpool v Real Madrid

Mario Balotelli substituted at half-time. Was shirt swapping the real reason?
West Indies tour of India: Hurricane set to sweep Windies into the shadows

Hurricane set to sweep Windies into the shadows

Decision to pull out of India tour leaves the WICB fighting for its existence with an off-field storm building
Indiana serial killer? Man arrested for murdering teenage prostitute confesses to six other murders - and police fear there could be many more

A new American serial killer?

Police fear man arrested for murder of teen prostitute could be responsible for killing spree dating back 20 years
Sweetie, the fake 10-year-old girl designed to catch online predators, claims her first scalp

Sting to trap paedophiles may not carry weight in UK courts

Computer image of ‘Sweetie’ represented entrapment, experts say
Fukushima nuclear crisis: Evacuees still stuck in cramped emergency housing three years on - and may never return home

Return to Fukushima – a land they will never call home again

Evacuees still stuck in cramped emergency housing three years on from nuclear disaster
Wildlife Photographer of the Year: Intimate image of resting lions claims top prize

Wildlife Photographer of the Year

Intimate image of resting lions claims top prize
Online petitions: Sign here to change the world

Want to change the world? Just sign here

The proliferation of online petitions allows us to register our protests at the touch of a button. But do they change anything?