Bartz's Yahoo Surges To New High

Remember when Yahoo’s stock price broke $9 and everyone was howling that it was going straight to $6?  We’re not hearing much of that chatter these days.

Yesterday, Carol Bartz-fuelled YHOO crawled its way back above $14.  True, this is a far cry from the $33 Microsoft offer that a delusional Jerry Yang sniffed at last summer, but it’s another step in the right direction.

Carol’s greatest contribution to the company so far, one that it desperately needed, is a willingness to make decisions. That the decisions Carol has made appear to be smart is an added benefit. (Among them: doing away with Yahoo’s Peanut Butter “matrix” management structure, realising that Yahoo holds all the cards in the Microsoft search negotiations and waiting for Steve Ballmer to beg, firing up the troops).

Can Yahoo continue its renaissance?  In our opinion, yes.  Carol’s next steps are to refocus the company on its core advertising business (which will likely involve more cost cuts) and then reinvigorate the sales effort.  The first of these should happen in Q2. The second will likely take the better part of the year. 

Disclosure: Henry Blodget has owned Yahoo stock since 1998.  He also works there (TechTicker). If you’re concerned that these blatant conflicts will just cause him to blow smoke up management’s posteriors, go back and read some of his posts from last summer, when Jerry was blowing the Microsoft deal.

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