“To all, I am very sad to tell you that I’ve just been fired over the phone by Yahoo’s Chairman of the Board.” That was the first sentence of a brief, two-sentence email sent out by Carol Bartz yesterday. Thus ended the reign of the most powerful woman CEO in Silicon Valley, after just thirty months at the helm.

In that time it was hoped that her abrasive, no-holds-barred approach would bring the once-powerful search engine giant back from the brink in a Google-eyed world.

It was a rocky ride. To Bartz’s credit, it should be noted that the company’s stock is now trading at $12.50, not much different than when she was first appointed CEO. While she may not have increased profits, she did manage to keep the business steady. But that was not enough for the board, which had hoped that she could do for Yahoo what Steve Jobs had done for Apple, or at least move the stock in that general direction.

That wasn’t to happen. Engineers have started fleeing the company, and the creative team has also taken some hits. Bartz’s departure overshadowed what would otherwise have been another front page news item, the departure of Liz Lufkin, Yahoo’s VP of front page programming, who pioneered the company’s front page personalization system. She was responsible for 600 million unique visitors every month, and billions of page views. All of these departures have resulted in an innovation drain in a market that thrives on innovation.

Perhaps the board’s expectations of Bartz were unrealistic. Before there was Google there was Yahoo, and before there was Yahoo there was Alta Vista, now long forgotten. The Board does not believe that, however. In a statement to the press, Chairman Roy Bostock said that it, “sees enormous growth opportunities on which Yahoo can capitalize, and our primary objective is to leverage the company’s leadership and current business assets and platforms to execute against these opportunities.”

The problem with Bartz was that she was not just a highly competent CEO—her time at Autodesk proves that. She was also a highly controversial figure, whose feuds with everyone from Yahoo founder Jerry Yang to Jack Ma of Alibaba (of which Yahoo owns 42 percent) raised both eyebrows and investor ire.

She also made powerful enemies in the press, for instance telling influential blogger Michael Arrington of Tech Crunch to “fuck off” in a public symposium. She also made enemies of many staff members she laid off, including former Senior Vice President Brad Garlinghouse, who tweeted in response to the news, “Ding dong the witch is dead.” Her popularity among the staff, once as high as 70 percent, dropped to 50 percent this year, which would make her a great Congresswoman, but not a great CEO.

Following Bartz’s typically blunt email, Yahoo announced that CFO Tim Morse would serve as interim CEO until a replacement could be found. He will receive the support of a “Leadership Council,” which will include five executive vice presidents. That counsel will receive additional counsel from founders Jerry Yang and David Filo.

The move may not be enough. Global Equities Research analyst Trip Chowdhry has already called Morse “much worse” than Bartz, adding, “Both Carol and Tim should have been fired together as they both have damaged Yahoo’s business and repairing it will be extremely difficult.” His major claim against Morse is that he focused exclusively on cutting costs, rather than on innovation, which Chairman Roy Bostock has named as critical to Yahoo’s success.

Yahoo’s stock went up 6 percent in after hours trading Tuesday night, in response to the announcement. It is still unclear what direction Tim Morse and the Leadership Council plan to take the company, but it will certainly be different from the direction it had under Bartz. The shareholders are counting on that.

Read More at NBC Bay Area
Read More at the International Business Times
Read More at Tech Crunch
Read More at the SF Gate
Read More at the Business Journal