At the company's , a shareholder called Bartz a "lame-duck CEO" and called for her resignation. Chairman Bostock defended her at the time.

Bartz was widely supported in the beginning. "She was kind of a breath of fresh air for a while," said Sterling. She had a strong track record as CEO of Autodesk and before that as an executive at Sun Microsystems, and had a "no-nonsense" style, Sterling said. She was known for her colorful language and dropped the "F-bomb" at least once during a company earnings call.

Bartz made a number of organizational changes and for a while had the bad economy to blame for Yahoo's lackluster performance, Sterling said. But ultimately she failed to retain some top talent who have left the company since she took over. "There were just a ton of great people that came out of there that abandoned ship," he said.

Yahoo needs a dynamic leader who will get people excited and bring a strong product vision, he added. Morse would clearly be an interim leader, according to Sterling, while the company looks to hire a permanent replacement.

Taking on a new leader while the company continues to struggle will be a challenge. "The problem with a new CEO is, if you have more of a revolving door," Sterling said. Often, new leaders want to bring in their trusted advisers and remove some existing executives.