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Carol Bartz Ousted As Yahoo! CEO [Internal Memos]

The mass exodus of Yahoo! executives has reached its peak – CEO Carol Bartz has been fired by Chairman of the Board, Roy Bostock. Timothy Morse has been named interim CEO, according to a Yahoo! press release titled “Yahoo! Announces Leadership Reorganization.” Though many saw this move coming, the timing was certainly a surprise. Late Tuesday evening, Bartz sent a short note to Yahoo! employees worldwide confirming her firing:

Carol Bartz Fired - Memo

Roy Bostock, Chairman of the Yahoo! Board, said, “The Board sees enormous growth opportunities on which Yahoo! can capitalize, and our primary objective is to leverage the Company’s leadership and current business assets and platforms to execute against these opportunities. We have talented teams and tremendous resources behind them and intend to return the Company to a path of robust growth and industry-leading innovation. We are committed to exploring and evaluating possibilities and opportunities that will put Yahoo! on a trajectory for growth and innovation and deliver value to shareholders.”

Bostock continued, “On behalf of the entire Board, I want to thank Carol for her service to Yahoo! during a critical time of transition in the Company’s history, and against a very challenging macro-economic backdrop. I would also like to express the Board’s appreciation to Tim and thank him for accepting this important role. We have great confidence in his abilities and in those of the other executives who have been named to the Executive Leadership Council.”

(The internal memo sent from Jerry Yang and the Board to Yahoo! employees moments after the announcement can be read in its entirety here.)

The troubles at Yahoo! have been well-documented over the last five years, and the tune did not change under the tenure of Bartz. The revelation by Bartz that her firing was executed over the phone is symbolic of the disastrous corporate messaging and human resource mismanagement that has characterized the company of late. The company has endured one of the greatest brain drains in history, which has only accelerated its downward slide in recent years. The psychological impact of Bartz’s departure – both on investors and employees – will be intriguing to note in the coming days and weeks. Early reactions from the market are favorable – Yahoo! shares are up 5.7 percent in after-hours trading on the news.

It has been speculated that Yahoo! has been actively searching for a replacement for months. Will Yahoo! bring in another outsider or will it promote from within? There is a powerful argument to be made that the high-profile executive exodus over the last two years has left Yahoo! with no alternative but to bring in another outsider to attempt another turnaround.

Read more from the always insightful Kara Swisher at AllThingsD here.

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The Hidden Force Behind Google, Microsoft, and Facebook

“If we’re innovating, if people have the tools to let their imaginations run, then there’s nothing we can’t do in this country.” President Barack Obama

At a political fundraiser in the humble home of revered Google executive Marissa Mayer – a mere stone’s throw from the famed garage that spawned Hewlett-Packard – President Barack Obama delivered these energizing words to approximately 50 Silicon Valley and Washington, D.C. heavy-hitter Democrats who reportedly paid $30,000 each to attend the intimate meet-and-greet in Palo Alto, CA. While these words may be perceived by some to be little more than populist political Utopianism, they speak to the heart of what Silicon Valley and burgeoning entrepreneurial pockets across the globe were built on.

Marissa Mayer - GoogleThe inextinguishable fire that burns deep within every entrepreneur is fueled by the kindling wealth of knowledge, tools and skills accumulated through experience and education. The latter is perhaps the most under-recognized factor leading to effective entrepreneurial success.

To be certain, visionaries by the likes of Steve Jobs, Mark Zuckerberg, Bill Gates, Jerry Yang, Sergey Brin and Larry Page each have an overwhelming presence of talent, passion, creativity, insight and natural intelligence within them. However, it would be incorrect to assert that these personal traits and qualities are the sole defining characteristics leading to their success. Siamak Taghaddos, the 29-year old millionaire co-founder and co-CEO of Grasshopper Group, noted that “education helped polish the inherent entrepreneur” within him and his partner, David Hauser. As Malcolm Gladwell famously outlined in “Outliers“, Bill Gates had unlimited access to a computer at the exclusive middle school he attended in the late 1960s to early 1970s – a time at which computers were far from being considered “personal”. Google founders Sergey Brin and Larry Page join Yahoo! founders Jerry Yang and David Filo as (sort of) alumni of Stanford’s famed school of computer science.

Bill Gates - "Get Schooled"These tech legends understand the importance of education, and they want to pass along that gift to young students today in hope of giving them the tools they received along their path to success. Mark Zuckerberg recently donated $100 million to New Jersey public schools, and the Bill & Melinda Gates Foundation, with its $33.5 billion (and growing) endowment, has contributed billions to initiatives that advance and improve education across the globe.

Most would agree that education facilitates learning, growth and development. But what many fail to recognize is that education allows passionate young individuals to discover and nurture the entrepreneur within them. It offers them the chance to mine their natural talents and fuse them with new tools, knowledge and skills that can catapult them to a higher level of thinking and understanding.

Education has helped cultivate bright young minds and shape them into entrepreneurial successes and legends of industry, and its importance can no longer be underestimated and ignored.

Search Wars: The Shifting Landscape in the Battle for Your Queries

Twelve years ago, when Google was handling just 10,000 searches per day, the landscape of online search was dramatically different. While the overall growth of the search engine market accounts for a large portion of their personal growth, Google has grown notably faster than the rest of the market. As of late 2009, Google handles over 250,000,000 searches per day, and represents as much as 70% of the global market share, according to numerous reports. The company name has become synonymous with searching, entering the english language as a verb: (“If you don’t know what a SERP is, Google it!”) However, while Google has experienced explosive gains in revenue, marketshare, and activity, other search engines have not fared as well.

Yahoo! Search and Microsoft’s Bing are considered the top competitors in the global marketplace, but their respective market shares are mere fractions of Google’s. Yahoo! ranks second with approximately 18% of the global market, experiencing steady declines, while Bing accounts for just over 9% of the global market.

Bing has been pitched as a revolutionization of search, marketed to cut out the random results and provide only the most accurate results. Microsoft smartly launched a massive, wildly expensive campaign to promote Bing not as a search engine, but a “decision engine”. Based on early reports and research, the campaign had measurable impact, stealing a portion of Yahoo!’s declining market share. The outlook was still grim, however. Stacking Bing’s 10% against Google’s share of 70% doesn’t result in a feasible competition for Microsoft.

After Microsoft’s disastrous 2008 takeover bid to purchase Yahoo! for $44.6 billion (a 62% premium at the time), both companies were left with a bad taste in their mouths, and heads eventually rolled. Yahoo! founder Jerry Yang was ousted as CEO, and reverted to his role as “Chief Yahoo”, making way for the hot-headed, always-vocal Carol Bartz. With a new leader at the helm, talks between the companies reignited, but Microsoft CEO Steve Ballmer had ruled out a complete takeover. Enter the “MicroHoo” search deal.

With Carol Bartz promising only to deal Yahoo!’s search business for “boatloads of cash” upfront, the company’s stock price steadily climbed in anticipation of the deal. When the deal was announced, however, investors were initially disappointed and slightly confused. The 10-year agreement between Yahoo! and Microsoft called for an integration of Yahoo!’s search technologies into Microsoft’s existing search platforms. Microsoft absorbed a large portion of Yahoo!’s capital expenditure costs, and through their revenue sharing agreement, would provide Yahoo! with a benefit of $500 million in annual GAAP operating income.

Though investors were intially disappointed that the deal did not include the “boatloads of cash” promised by Bartz, causing Yahoo!’s stock price to drop considerably, industry experts realized that the deal provided substantial benefits for both companies. Yahoo! enjoys considerable growth in revenue, with the first 18 months of revenue per search guaranteed by Microsoft. Similarly, Microsoft will enjoy a large boost in market share, allowing the two companies to more feasibly compete with Google. Together, they represent nearly 30% of the overall search market. Many assert that 70-30 competition is much easier than 70-10 competition.

The deal is still in its early stages of implementation, but Microsoft has already begun paying Yahoo! for use of its search technologies. As the partnership matures and the full effects are understood, we may witness a powerful shift in the complexion of the search engine market. For now, however, Google remains the sole dominant force, enjoying the blessing of techies and pop-culture heavyweights alike.

What do you think about the MicroHoo deal? Legitimate competition for Google?