Yahoo Inc.’s chief operating officer, Henrique De Castro has resigned from his position after serving the company for about fourteen months.
De Castro was hired by Yahoo’s high-profile chief executive officer, Marissa Mayer with the aim of turning around Yahoo’s sagging core advertising business. Prior to this, De Castro worked with Google . Marissa Mayer had roped him in for a whopping $58.0 million in the hope that his expertise would help revive Yahoo’s advertising sales.
De Castro was probably fired because he failed to deliver results. But Yahoo hasn’t officially said anything either regarding the reason for the expulsion, or regarding the identity of the replacement. But considering the fact that it is a key position, it should be filled quickly.
Yahoo has recaptured its position as one of the world's most-visited online properties, but its revenues aren’t responding as yet. Mayer has stepped up investments in key technologies both on the product side and the technical side, but investors have been told to be patient about resultant revenues.
Mayer has also overhauled the company’s e-mail platform and acquired more than two dozen companies, including Tumblr Inc. for more than $1 billion last year. It has hired leading journalists to bolster news and media content. The departure of the COO at this juncture could therefore indicate trouble.
Though De Castro's hiring turned out to be a misstep, Mayer will likely be given more rope as stockholders have made an enormous amount of money since the time she joined the company. Though Yahoo managed to be profitable under Mayer, it struggled to register sales growth.
Currently, Yahoo has a Zacks Rank #4 (Sell).Other better ranked stocks in the sector include Baidu (BIDU - Free Report) and Interxion Holdings NV (INXN - Free Report) , both with a Zacks Rank # 2 (Buy).