5 Mistakes Carol Bartz Made as Yahoo CEO

Now that Yahoo is searching for a new CEO and activist investor Daniel Loeb's Third Point is trying to stir the pot, here are some things that former CEO Carol Bartz could have done to keep her job:

Buy Zagat. That company had been for sale even before she arrived at Yahoo in January 2009. Now, it has been acquired by Google for an unreported amount that may be around the $200 million Tim and Nina Zagat said they wanted.

Adding the restaurant reviewer to Yahoo, combined with Yahoo Maps and Yahoo Shopping might have helped build traffic and add some class due to Zagat Survey's cachet. The company had cash and investments exceeding $3.25 billion on June 30.

Buy OpenTable. The restaurant reservation service went public in May 2009 and now has a market capitalization of $1.33 billion and enterprise value of $1.29 billion, the figure looked at by investment bankers.

Bartz could have reached out to its previous owners, Benchmark Capital Partners, Impact Venture Partners, IAC/InterActiveCorp. and Integral Capital Partners, which all knew her from her successful tenure at Autodesk and Sun Microsystems, and bought the company for less in her first months at Yahoo. To be sure, the venture capitalists might have preferred to cash out via an IPO.

Develop Yahoo's Android. Under former CEO Eric Schmidt, arch-rival Google spent heavily to develop this OS for smartphones to take advantage of new products, now including the iPad. Holder of a doctorate in computer science, Schmidt is no dummy and he learned plenty as a director of Apple.

Now Google's Android OS controls the majority of the world's smartphones. And Google wants to spend $12.5 billion to acquire Motorola Mobility to own a chunk of the smartphone market.

Once again: Yahoo has cash exceeding $3.25 billion. In the first half of 2011, the Sunnyvale, Calif.-based company spent $490 million on product development. It could have developed its own OS.

Protect the Yahoo brand. Time was Yahoo was everyone's first link to the Web. Not only was Yahoo first, it was fun. And co-founders Jerry Yang and David Filo, the Chief Yahoos tried to keep it that way, with everything from purple colors and easy-to-use features. Then they added all kinds of features like shopping, maps, news and the like.

Yahoo is still No. 1 in visits but it has lost share. Why has to Google entered the English language but not to Yahoo.

You have to manage the brand, Clive Chajet, one of the world's best-known brand specialists, told IBTimes. You have to develop a compelling message of meaningfulness and usefulness, he added.

Bartz may have spent too much time promoting herself rather than the company, Chajet. That's a big mistake.

Attract smart enough directors. Yahoo's directors are all mainly second-tier people, retired accountants, ad executives, the president of Akamai Technologies, etc.

Look at Google's board: besides Schmidt, no longer CEO, there's co-founders Sergey Brin and Larry Page; legendary venture capitalist John Doerr; Paul Otellini, Intel CEO; Ann Mather, a former EVP and CFO of Pixar; K. Ram Shriram, an alumnus of Amazon.com and Netscape, as well as Shirley Tilghman, president of Princeton, and John Hennessy, president of Stanford.

These people open doors that Yahoo's directors don't. Google has digitized millions of books in university libraries that now enrich its search but also provide details and depth to Google Maps and other places. The project also made Google look good in academic circles.

Why couldn't that have been a Yahoo project? Yang, who was born in Taiwan, is a cultural hero among Chinese, both in the U.S. but worldwide. And China is one market where Yahoo is thriving, although Bartz angered principals behind Chinese partners like Alibaba.

No wonder investors are starting to look at Yahoo, which Third Point's Loeb characterizes as an iconic American asset.