Yahoo CEO lets go top lieutenant in surprise move

Published on NewsOK Modified: January 15, 2014 at 8:41 pm •  Published: January 15, 2014
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SAN FRANCISCO (AP) — Yahoo CEO Marissa Mayer is cutting loose her top lieutenant in a possible sign that the Internet company's efforts to revive its long-slumping advertising sales aren't paying off.

Wednesday's surprise announcement of the departure of Yahoo's chief operating officer, Henrique de Castro, represents a setback for Mayer, who signed him to a $58 million deal just 15 months ago to help her lure more advertisers to a company that has been struggling to compete against Google Inc. and Facebook Inc. in the race for online marketing dollars.

Yahoo Inc. declined to comment on the reasons for de Castro's abrupt exit. Mayer didn't name his replacement.

It's doubtful de Castro would be leaving if he were bringing in the revenue that Mayer envisioned, said BGC Financial analyst Colin Gillis.

"This was one of her key hires and he is already gone," Gillis said. "It doesn't look good."

Mayer, who knew de Castro from the days when both executives worked at Google, will likely be questioned about what went wrong when she reviews Yahoo's financial results for the fourth quarter, scheduled to come out Jan. 28. The Sunnyvale, Calif., company hasn't warned that it missed its revenue forecast for the three-month period ending in December, an indication that Yahoo must have at least been reasonably close to hitting that financial target set by Mayer. Yahoo had projected fourth-quarter revenue of about $1.2 billion after paying commissions to its ad partners, unchanged from the previous year.

De Castro, 48, will leave Yahoo with much of the money and stock that he got when Mayer lured him to California from a Google advertising job in Europe. His severance package includes $20 million of restricted stock that wasn't scheduled to fully vest until late 2016. He also will receive $1.2 million to cover the next two years of his salary. His rights to another batch of restricted stock valued at $9 million also have vested.

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