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Yahoo’s Uncertain Future After CEO Bartz’s Firing

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    Morningstar Senior Equity Analyst Rick Summer on the challenges facing Yahoo.

  • Duration 6:06
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Call now let's get to the Yahoo! shake up Carol Bartz.

Who took over in 2009 is out after -- rather abrupt move by Yahoo!'s board to oust the former chief executive.

She has confirmed to me and Fox Business that she was in fact the so lastly fired over the phone is that really really.

About how those boards work now I had a chance to speak with Carol Bartz exclusively just about a year ago now I asked her what kind of year she was having a lot of talk of -- topic was what she was trying to do.

Here's what she said back then one year ago.

It's actually been a -- But pressure it has done but you know I came to Yahoo! year and half ago and I am more excited -- the first I want to door.

But it proved to be a very tough effort to try and turn this company which was in its hey day for -- right everybody went on Yahoo! but.

Very tough to bring that back fast forward to today.

What does this mean for the future of Yahoo! and shareholder value joining me now live from Chicago in a -- this is exclusive is a guy who watches this closely Rick summer.

Senior equity analyst at Morningstar who covers Yahoo! okay.

What happens now does it get carved into pieces does it get picked up by private equity even though Jerry Yang.

Saying today that that wasn't going to happen that it wasn't for sale your best guess.

We that we had a lot of troubles here for this company you know obviously there's been you know over the course of the last several quarters.

Investors pushing to trying car out some of these Asian assets.

Now we have a company -- a chief and and a company in a lot of ways about a strategy.

You know our view is at any all bets are off these guys will do anything they can to try and monetize this.

But there's a lot of challenges and we're really advising at least our client base to stay away from this and at this point.

You're saying stay away is that a sell is that is that interest to hold.

We think it's actually trading a little bit below what it's worth but the challenges are are are really immense.

You know there's two things that are -- from them one at the core business is not operating particularly well.

Searches the search partnership but Microsoft is really underperforming.

Display is lagging the market.

And then two we know they've been pursuing a strategy quite actively to try and unload these Asian assets.

While Carol what might not have necessarily help that cause.

With -- relationship that she hadn't Jack Ma.

It's not clear that you know going forward there any closer to any realizing any value there.

Right it was -- challenge is.

Should we should point out it was a somewhat of a tense relationship with Jack -- because obviously there there was some underhanded behavior at least perceived underhanded behavior on behalf of Alibaba but it's.

Really valuable they also have Yahoo! Japan because I'm just pointing -- to people you mentioned Asian assets but.

I mean is it not -- for this board or they just so dense.

That you have to carve this up I mean that they can't be that -- if they fire somebody over the phone I had heard -- them we get that local news and but I do think that how -- corporate America.

Yeah I would I would describe this to density I think that there's a there's a certain sense of desperation now.

It's real hard it's not logical who that buyer would be.

You know we've heard rumors.

Even AOL buying Yahoo! I don't I don't know how that would happen and we've heard the rumors going the other way to Yahoo! by AOL as an example do you even care to -- -- -- bail -- -- you care.

-- eight it eggs exactly I mean you've you've got you've got Hannity very very sick dogs and is not necessarily -- to meet those two.

And I really see what ends up happening in that in that sense.

I think that -- real challenge is.

Any any buyer may have it -- problem unloading those there -- baba group and unloading Yahoo! Japan and ultimately realizing any value from that so.

Trying to transfer of the problem from Yahoo! Shiller homeless for another shareholder it's not clear they're gonna that they -- pay a premium for that.

I you've got to talk about the missed opportunity that came weighed before Carol Bartz was even there and that was in 2008 when.

There was this opportunity to merge with Microsoft Microsoft offered 47 billion for this company's stock was up to about thirty something dollars.

Earlier this year I asked I want you to hear this because I asked Microsoft chairman Bill Gates and former Yahoo! president she was president at the time of that offer sue Decker.

If Yahoo! -- teamed up with Microsoft when it had the chance in a bigger way than it actually did here's what they sent.

Yeah absolutely I think it was a mistake to not.

That that the merger was not affected was a mistake for -- national service bill.

-- -- Companies are doing a lot together.

You know Google's a very tough competitor and so combining that some strength Yahoo! and Microsoft clearly made sense.

But that was done through merger or through big key business deal which is where it ended up.

That gives.

That partnership the chance of competing with Google and making sure they they don't get too lazy.

Rick that's obviously rear view mirror stuff but in the end can anything save Yahoo! or is it sort of the the AOL all of the world of the MySpace or some of these these at big dot -- companies that did so well and then just couldn't get -- mountain back.

Not not quite there yet -- -- always say one thing you do have some pretty good advantages they have some very nice properties they have Yahoo! mail is still as a as a relevant property that they have Yahoo! Sports Yahoo! finance.

Really generating a lot of traffic.

The challenges where they go from here and I think is a platform to grow as a content based company.

That's the biggest challenge in the Internet right now and moving beyond that is it is key.

It's too when you have so much of your guidance tied up in Alibaba Group and so much of your -- -- is tied up in Yahoo! Japan.

And and and a little bit cast here as well it's not clear that the stock price really creates a lot of real opportunity on the upside.

OK Rick thank you -- doesn't so much reduced about the stock and we appreciate you coming on Rick summer senior equity analyst at Morningstar just -- point this out.

This coming out September 12 this is the the Forbes 100 most powerful women.

-- it went to print before the ouster of Carol Clark she's listed as the number 37.

Most powerful woman.

-- -- interested in.

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