Yahoo's Bartz: When Things Are Bleak, Build a Monument

(MoneyWatch)  There are times that ego can drive greatness in a company because someone at the helm simply can't stand to be second best. For all the criticism I've leveled at Apple (AAPL), CEO Steve Jobs is an example of what can go right -- at least sometimes. And then there is the corporate ego that leads into pretty silly undertakings. Yahoo's (YHOO) CEO Carol Bartz is increasingly falling into that category and is now planning an undertaking that will be a waste of money, all for self-aggrandizement.

Apparently the company is planning a humongous new office complex in Santa Clara. Is it really so bursting at the seams of its current buildings that expansion is the only option?

Yahoo laid off 2,000 people in the spring. In July, it agreed to off-load search R&D to Microsoft (MSFT). Google (GOOG), which has 7,000 more employees and $15 billion more of revenue, makes do with a complex smaller than the one Yahoo is planning for Santa Clara.

Plus, business slowdowns have left lots of office space open it its neck of the woods, with a vacancy rate of over 20 percent. Jeez. That's a whole heck of a lot of cubicles left unloved and unused.

When a company is trying to sail through rocky water, has been laying people off, and is in an area with lots of space to spare, there is only one word that describes the motivation: CEO ego. Having an abundance of space isn't new to Bartz. Back in February, just after she left, Autodesk found itself subleasing at least 80,000 square feet of its own space as part of an austerity program that also included a salary freeze, senior executive pay cut, and facility consolidations. If things were getting that bad, shouldn't the company have gotten rid of excess seating capacity before?

So far, her time at Yahoo has been a little puzzling:

• Her reorganization in February addressed organizational issues but not important fundamentals with which the company had to struggle.
• By May, revenue was essentially down to 2006 levels.
• In June, Bartz wrote off potential competition from Microsoft and said that Yahoo would have been better off never having heard of a search deal.
• By July, Bartz wanted to be the center of customers' lives, not focused on making customers lives and desires the company's center, a very different tone and approach from such companies as Apple, Google (GOOG), and IBM.
• September brought a $100 million advertising campaign as geared to convincing Yahoo of its own worth as convincing consumers.
• Last quarter's "improvements" in performance were nothing to write home about.
• Bartz's publicly snippy behavior toward Carl Icahn showed a disdain for large shareholders, which is pretty stupid for a CEO to do.

It's all ego, pure and simple, and for a company in this situation to even consider a massive new campus makes about as much sense as the captain of the Titanic to order drinks on the house on spotting a few icebergs.

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