It had long been rumored that De Castro, whom CEO Marissa Mayer had brought on from Google, would be departing. De Castro had been hired to take the lead in the company's advertising business, having been given credit by some for building Google's display ad biz. But it's been said that De Castro was a polarizing figure -- even having the distinction of having a parody Twitter account made for him.
Back in September, AdWeek reported that De Castro was "on the outs" with Mayer, and that he had been feeling the pressure to produce better advertising results. The report speculated that he could be gone by the end of the year.
Recode's Kara Swisher, who first reported the news of De Castro's departure, noted his absence during the company's events at last week's Consumer Electronics Show in Las Vegas. According to Swisher's report, De Castro also had been fighting for power from new SVP of Americas Ned Brody, mergers and acquisitions head Jackie Reses, and marketing head Kathy Savitt. (Swisher later published Mayer's memo to staff about De Castro's departure, in which the Yahoo CEO says, "I made the difficult decision that our COO, Henrique de Castro, should leave the company." You can read the full memo below.)
Under De Castro's tenure, Yahoo's ad business has had its travails. In 2013, Yahoo lost its spot as the No. 2 digital ad seller in the United States behind Google, when Facebook took its position for the first time, according to research firm eMarketer. Also according to the firm, Yahoo's share of digital ad revenues declined both in the US and globally, down to 5.8 percent in the United States in 2013 from 6.8 percent the year before.
Yahoo declined to comment beyond what was in the regulatory filing.
Update, 3:23 p.m. PT:Adds information about Yahoo's ad revenues.
Update, 4:05 p.m. PT:Recode's Kara Swisher got hold of Marissa Mayer's memo to staff regarding De Castro's departure. Here's the text:
YAHOO PROPRIETARY AND CONFIDENTIAL -- DO NOT FORWARD
The beginning of a new year always provides time for reflection. As we enter 2014, I could not be more proud of what Yahoo accomplished in 2013 or more optimistic about what we will accomplish in 2014. I want to thank all of you for being so engaged and so thoughtful around the direction of the company.
During my own reflection, I made the difficult decision that our COO, Henrique de Castro, should leave the company. I appreciate Henrique's contributions and wish him the best in his future endeavors.
Effective today, we will restructure the leadership of the operating organization as follows:
- Dawn Airey, John Devine, Ned Brody, and Rose Tsou will report directly to me.
- I've asked Kathy Savitt to lead our media and editorial functions.
- Several functions in the COO org align well with product initiatives in Mike Kern's Homepages & Verticals group and will report there moving forward.
We will reach out to specific individuals on reporting changes. As always, there may be further changes to increase alignment and sharpen our media and product focus; those changes will be messaged within the affected groups.
Overall, I'm confident that the leadership team, our direction, and these changes will enable even more successful execution. Thank you for your patience and understanding as we work through these changes.