Online media company Yahoo has fired Chief Executive Officer Carol Bartz, who was brought on board two years ago to turn around the company’s troubled fortunes, and named Chief Financial Officer Tim Morse as interim chief executive.

Under a “leadership reorganisation” move, the California-based company yesterday announced that its board of directors has appointed Morse as interim CEO with immediate effect, replacing Bartz, “who has been removed by the board from her role” as CEO.

Morse would continue to shoulder the responsibilities of his current role as Yahoo Chief Financial Officer.

In an e-mail message to employees titled ‘Goodbye’, Bartz, 62, said she is “very sad to tell you that I have just been fired over the phone by Yahoo’s chairman of the board.”

“It has been my pleasure to work with all of you and I wish you only the best going forward,” she wrote.

Yahoo said it is “commencing a search for a permanent Chief Executive Officer” and will work with an executive search firm to help identify candidates for the position “as expeditiously as possible“.

“The board sees enormous growth opportunities on which Yahoo can capitalise and our primary objective is to leverage the company’s leadership and current business assets and platforms to execute against these opportunities.

We have talented teams and tremendous resources behind them and intend to return the company to a path of robust growth and industry-leading innovation,” Yahoo Board Chairman Roy Bostock said in a statement.

“On behalf of the entire board, I want to thank Carol for her service to Yahoo during a critical time of transition in the company’s history and against a very challenging macro-economic backdrop,” Bostock said.

Bostock added that Yahoo is committed to evaluating possibilities and opportunities that will put it on a growth trajectory and deliver value to shareholders.

The board also named key senior Yahoo executives to a newly formed ‘Executive Leadership Council’, which will support Morse in managing the company’s day-to-day operations until a permanent chief executive is appointed.

The council will also undertake a “comprehensive strategic review” to position the company for future growth.

In addition to Morse, the council will consist of Yahoo Executive Vice-President, General Counsel and Secretary Michael Callahan, Executive Vice-President and Chief Product Officer Blake Irving, Executive Vice-President for the Americas Ross Levinsohn, Senior Vice-President and MD Rich Riley and Senior Vice-President APAC Region Rose Tsou.

Yahoo Co-Founders David Filo and Jerry Yang will also provide counsel to Morse and the executive leadership team.

Morse said he looked forward to working with the council and partnering with the board to “invest in the organisation and continue to drive its ongoing growth plans“.

Bartz, who joined Yahoo in January, 2009, was tasked with revitalising the company, which had been suffering from stagnant growth and a decline in advertising revenue.

While Yahoo offers a wide portfolio of services like web search, news, finance and sports, its financial woes increased as newer social networking sites like Facebook and Twitter lured users as well as advertisers.

Yahoo has also been facing a mass exodus of its key executives in the last one year, including Senior Vice-President David Ko, Vice-President of Media Jimmy Pitrao, Head of Revenue for North America Joanne Bradford and Yahoo Vice-President of Social Platforms Neil Sample.

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