Does Yahoo COO Firing Point to Internal Troubles?

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Jan. 16 (Bloomberg) -- Bob Herbold, former COO at Microsoft, discusses the underlying problems at Yahoo exposed by the firing of chief operating officer Henrique de Castro on Bloomberg Television’s “Bloomberg West.”

Is it a personality thing or does it have to do with the numbers not looking good?

I think there is a realization that things are not that rosy in regard to their fundamental business.

If you look at that display revenue being down seven percent, 31% of their revenue comes from a microsoft supplying the search engine.

Most of their market value is in alibaba stock, part of the market cap is in that stock.

They are in a lot of trouble.

They're really struggling.

The issue is the core model.

What is their contribution to the technology arena today?

It is a dated company.

They have not resurrected it.

Has part of the question here -- yahoo!

Is not very clear about what they are.

Exactly.

It is more like a collection thick of things than anyone mission.

That is exactly right.

Their finance site is good.

There are many other alternatives.

There are alternatives in this world and that is why they are floundering.

How do they reflect on murtha meyer?

She is making this decision very public.

She has made attractive -- attracting top talent her focus.

I think that it is good to hire top-notch people.

We are waiting for the leader to put a new business model out on the table.

She needs to create excitement for yahoo!. the buck stops with her.

Yes, hiring this person may make everybody feel better in terms of creating some energy around it, that the fact is -- where is the new business model?

Where is the sizzle that will take them back from the doldrums to something exciting?

Let's move the focus more broadly to the valley in general.

Do you feel like there is $109 million for 14 months of not good work -- is this indicative of a race for talent that has gotten out of hand?

People are throwing around money and it needs to come back down to earth a little bit?

[audio deleted] i could not agree more.

I kind of trick is something that you would've expected on wall street.

Not out of silicon valley.

What you usually count on them doing is coming up with some ingenious idea from surprising people.

It is not hiring all-stars.

It is the person who suddenly stumbles on something.

There is a culture that enables that idea to grow and achieve some notoriety.

It is a sad tale for yahoo!. you said that this is not what silicon valley is about.

It sounds like professional sports, where you wind up with a player on your roster.

More like an allan houston, james dolan situation.

You are stuck with this big pile of money.

It seems like this cannot continue.

Absolutely right.

This is not the way to do it.

We need some ingenious thinking.

I do not think you will higher all-stars for musso to speak.

The supply of that -- you get good talented people.

They need to find some magic here.

Move to the next level in terms of what they offer the public area baseball needs to have some changes too.

What about the acquisition spree?

Marissa mayer has been buying these companies.

Is that the right way to go?

A lot of these companies are defined, not doing well.

This is about bringing in new blood and new talent.

To tell you the truth, if you look across the acquisitions that go on in the industry, acquisitions are tough.

Rarely do they really represent the powerhouse behind the engine, so to speak.

That will drive you to the next level.

Some of these are solid.

They are good acquisitions in some cases.

In others, you scratch your head.

Usually, the batting average is not that high.

All right.

Bob herbold, we will talk with you more after the break.

We will talk about microsoft and

This text has been automatically generated. It may not be 100% accurate.

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