Yahoo fires COO Henrique de Castro

A replacement has not been named; tensions with CEO cited

Yahoo's Chief Operating Officer Henrique de Castro is leaving the company a little over a year after he was hired, according to a filing by the company.

Castro was hired by Yahoo CEO Marissa Mayer in October 2012 from Google, where he was vice president of Google's worldwide partner business solutions group. Reporting directly to Mayer, he was to be responsible for strategic and operational management of Yahoo's sales, operations, media and business development worldwide.

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Mayer praised at the time De Castro's experience in operating an online advertising business and in building up a global organization. Also a former Google executive, she had only recently joined the company as CEO in July 2012 and was building a team to turnaround the ailing Internet giant.

But relations between Mayer and Castro appear to have deteriorated since then, as is evident from the terse communication by Yahoo to the U.S. Securities and Exchange Commission. Yahoo could not be immediately reached for comment. But Re/Code has published an internal memo from Mayer where she tells Yahoo staff that she fired him.

In its filing, Yahoo said de Castro will be leaving the company effective Thursday. He will receive the severance benefits provided for in his employment offer letter, dated Oct. 15, 2012, and equity award agreements, the company added.

Yahoo did not give a reason for Castro's exit. The company has also not named a successor to Castro.

In an internal memo to employees, published by technology news site Re/code, Mayer said she "made the difficult decision that our COO, Henrique de Castro, should leave the company."

Mayer announced a reorganization of Yahoo's leadership in the email, including requiring several functions that were earlier part of the COO organization to report to the Homepages & Verticals group run by Mike Kern. Chief Marketing Officer Kathy Savitt will lead Yahoo's media and editorial functions.

Yahoo has made a number of acquisitions, added new products and exclusive content besides giving its email a new look, as part of efforts to turn around the company. But its efforts to boost its revenue have not been very successful. Yahoo's revenue for the third quarter of 2013 of $1.1 billion was down 5 percent from the same quarter a year earlier. Its profit for the quarter of $297 million was far lower than in the same quarter in the previous year.

Research firm eMarketer, however, said in December that Yahoo's share of the digital advertisement revenue in the U.S. declined to 5.8 percent in 2013 from 6.8 percent in the previous year. The company's share is forecast to shrink further to 5.0 percent by 2015.

John Ribeiro covers outsourcing and general technology breaking news from India for The IDG News Service. Follow John on Twitter at @Johnribeiro. John's e-mail address is john_ribeiro@idg.com

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