Interesting development today at YH. Will they want to grow their revenue base through acquisition?
Yahoo Parts Ways With Its No. 2 Executive
By VINDU GOELJAN. 15, 2014
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Marissa Mayer, Yahoo's chief executive, fired Henrique de Castro, the company's chief operating officer, after persuading him to leave Google. Frank Franklin II/Associated Press
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SAN FRANCISCO — Yahoo’s No. 2 executive, Henrique de Castro, has been fired by his boss, Marissa Mayer, a little more than a year after she wooed him away from Google to help her turn around the struggling Internet company.
Yahoo, which has lost ground in recent years to competitors like Google and Facebook, announced Mr. de Castro’s departure in a terse, two-sentence document filed with the Securities and Exchange Commission after the stock market closed on Wednesday.
There was none of the usual corporate boilerplate that typically sugarcoats such departures — no praise for his service from Yahoo’s chief executive, Ms. Mayer, no mention of a sudden interest that Mr. de Castro had taken in spending more time with his family. A Yahoo spokeswoman said the company had no further comment on the matter.
But Ms. Mayer, who left Google to become Yahoo’s chief executive in mid-2012, was clearly displeased with Mr. de Castro’s performance.
Related Coverage - Breakingviews: Why It May Take More Than Former Google Stars to Turn Yahoo AroundJAN. 16, 2014
In a memo announcing the leadership reorganization to Yahoo’s staff, she wrote, “I made the difficult decision that our COO, Henrique de Castro, should leave the company. I appreciate Henrique’s contributions and wish him the best in his future endeavors.”
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Henrique de Castro, shown in 2010 when he was an executive at Google. Sebastien Nogier/Reuters “Overall, I’m confident that the leadership team, our direction, and these changes will enable even more successful execution,” she wrote near the end of the memo, which was first published by the technology news site ReCode.
Over the past year, Yahoo lost its position as the No. 2 digital ad seller in the United States to Facebook, according to the research firm eMarketer. Yahoo had just 5.8 percent of the market, compared to 7.4 percent for Facebook and 39.9 percent for Google. The company posted similar declines overseas.
Clark Fredricksen, a vice president at eMarketer, said that Yahoo has so far failed to transition its advertising from the desktop to mobile, which has contributed to the declines.
But he said the company has been laying the groundwork for a possible turnaround.
“They are streamlining the experience for advertisers, which is positive,” Mr. Fredricksen said. “They are improving the quality of the ad experience for users. They are making investments that will help grow their user base and ad revenues.”
Mr. de Castro will not be around to see if those efforts bear fruit.
But he will be walking away with a substantial severance package. The final amount has not yet been determined and will hinge in part on how well he did in reaching performance targets set for 2013.
In his October 2012 offer letter, he was promised stock-related compensation with a target value of $56 million, vesting over four years, as well as unspecified severance benefits. Although he will not be entitled to receive all of that money since he left before the end of four years, he will receive a large portion of it.
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