Carol Bartz out at Yahoo

CFO Tim Morse named interim CEO

Carol Bartz is out as CEO of Yahoo, triggering a guessing game regarding her replacement that includes some familiar names in media circles.

The exec has been ousted by the board of directors after nearly three years at the company, where she failed to engineer a turnaround. Yahoo’s stock price remains in the low teens, the same level it was at when Bartz arrived in 2009.

Yahoo CFO Tim Morse has been named interim CEO. Yahoo issued a statement late Tuesday confirming its removal of Bartz as well as the formation of an executive leadership council charged with working with a recruitment firm to find her replacement and supporting Morse in oversight of the company.

Among the execs already being discussed as Bartz’s replacement includes Peter Chernin, the former CEO of News Corp. Reached for comment, a spokeswoman for Chernin stated,”Peter Chernin is not considering being CEO of Yahoo.”

Another exec who has spurred speculation is News Corp. chief digital officer Jon Miller. Back in 2008, he reportedly tried to corral private-equity groups to buy Yahoo, and has a close ally in executive VP Ross Levinsohn said to be agitating for his hire from within the company. Levinsohn and Miller previously ran a venture-capital firm together.

Formerly CEO of Autodesk, Bartz stepped in for co-founder Jerry Yang, who doubled as CEO. Former Warner Bros. co-chairman Terry Semel also previously held the top post at Yahoo.

Unknown is how Bartz’s departure could affect Yahoo’s interest in acquiring Hulu. Yahoo has been mentioned as a contender to make the purchase, as has Google, Dish Network and Amazon.Bartz tried to bring some focus to the sprawling empire that is Yahoo, which is oft criticized for being in too many businesses rather than concentrating on areas of strength.

“This news signals that the Yahoo turnaround story remains very much a work in progress,” said Credit Suisse analyst Spencer Wang.

Yahoo has watched its place in the online display advertising market dwindle in the face of increasing competition. Yahoo’s 2011 share of 13.1% is down from 14.4% the previous year, according to eMarketer, while Facebook and Google are rising to 17.7% and 9.3%, respectively.

Bartz sent a two-line email to Yahoo employees Tuesday afternoon: “I am very sad to tell you that I’ve just been fired over the phone by Yahoo’s Chairman of the Board. It has been my pleasure to work with all of you and I wish you only the best going forward.”

“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,” said Roy Bostock, chairman of Yahoo’s board.

Shares of Yahoo climbed 6% in after-hours trading.