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Tickers in this Article: YHOO, GOOG, MSFT, ADSK
I expect there will be no shortage this week of commentary, critique and analysis of Yahoo!'s (Nasdaq:YHOO) selection for chief executive officer (CEO), Carol Bartz. Bartz's track record makes her an acceptable choice. A seasoned, committed CEO is what Yahoo! needs most to tackle head-on the company's biggest challenges.

During the 14 years which she served as CEO of design software firm Autodesk (Nasdaq:ADSK), the company's revenues grew from less than $300 million to more than $1.5 billion, and the company's stock value increased nearly tenfold. Before that she held roles at Sun Microsystems and 3M.

Fortunately, Yahoo!'s President Sue Decker has opted to resign from the company. For some time now, Decker has been regarded by insiders and outsiders as a natural choice for the top spot at Yahoo!. Decker's departure will allow Bartz to conduct a thorough shake-up of the executive suite and gain the confidence of Yahoo!'s increasingly irate shareholders.

Indeed, Yahoo! has taken a beating since it rejected takeover advances from Microsoft (Nasdaq:MSFT) earlier this year. Shares of the internet company are now priced at around $11.50. That's a far cry from a few months ago when Microsoft was offering to buy Yahoo for $33 per share. Meanwhile, Yahoo! continues to lose more search market share to Google (Nasdaq:GOOG).

Unfortunately, Bartz lacks chops in online advertising, Yahoo!'s biggest source of revenue and also the segment where it needs the most help. Display ad revenue growth has been weakening throughout the year. Citi analyst Mark Mahaney expects that Yahoo! will post a 1% year-over-year decline in its core display ad business when it reports fourth-quarter earnings later this month.



Bartz has a great opportunity to a lead a successful turnaround at Yahoo! Problems aside, Yahoo! is not likely to plunge suddenly into the red anytime soon. The company has a sizable stockpile of cash, very little debt and produces strong cash flow. Even if Yahoo! gets hit hard by the economic downturn, the popular online destination still possesses enormous brand value.



There is life left in Yahoo! Bartz could be the catalyst to send the shares higher.

For further reading, see Is Your CEO Street Savy?

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