CEO of Yahoo Carol Bartz Ousted by Board: Here’s Why She Failed

Carol Bartz is no longer the CEO of Yahoo, reported AllThingsD, citing sources at the company. CFO Tim Morse will take over as the interim CEO.

AllThingsD reported that the board of the company, specifically Chairman Roy Bostock and Co-founder Jerry Yang, informed Bartz of the need to make a change.

Yahoo hasn't done terribly under Bartz's 30-month tenure. However, it hasn't done well at all, either.

In fact, Yahoo's board members aren't the only people who are concerned; AllThingsD reported that investors have pull[ed] out their spreadsheets about a variety of scenarios related to Yahoo, including taking it private or splitting it apart.

Assuming the report is true (AllThingsD has proven reliable in the past), what went wrong for Bartz (aside from her gaffes)?

Before joining Yahoo, Bartz proved herself a capable executive in the technology world.

At Yahoo, she cleaned up the company and cut some costs. Her accomplishments, however, weren't what Yahoo needed.

One of the biggest misconceptions in the tech world is that business executives can run tech companies in fast-moving spaces like the Internet and consumer electronics.

The truth is that they can't. Only technology people - the scientists, engineers, programmers, nerds, and hackers - can.

A second and related misconception is treating these companies as anything but tech companies.

Some consider Yahoo, for example, to be a media company. Yahoo is a media company if it wants to be stagnant and mediocre. However, if it wants to grow, it has to be a tech company.

Only tech CEOs who can create new products can run tech companies.

Steve Jobs is case in point.

In the early years of Apple, he created successful consumer computer products.

When he was ousted, Apple spent a decade losing in the consumer computer market and launching failed products.

When he returned, he carved out an empire with the iPod, iPhone, and now iPad.

The phenomenal success of Apple didn't result from the operational tinkering of some business executive. Instead, it was the result of a techie who created amazing products.

For Yahoo, success was never going to come from the operational meddling of Bartz. What Yahoo really needed to do was hire an engineer CEO to create new products or at least innovate upon existing ones.

Bartz was never about that. And Yahoo is now scrambling for a new CEO.

Let's hope the board doesn't opt for another business executive.