Yahoo Inc.'s board ousted Chief Executive Carol Bartz on Tuesday after growing impatient with the lack of a turnaround at the once-highflying Web company.

The move was abrupt, amid a raft of competitive and strategic challenges facing Yahoo. Ms. Bartz, 62 years old, was informed of the board's decision by phone and wasn't expecting the change, said a person familiar with the matter.

Yahoo's stock jumped more than 6% to $13.72 in after-hours trading after news of Ms. Bartz's exit was reported by All Things D, a technology website that, like The Wall Street Journal, is owned by News Corp.

Yahoo Under Bartz See a timeline of her work there. More photos and interactive graphics

Yahoo has let go of Carol Bartz and named Tim Morse as interim CEO. Kara Swisher and Rolfe Winkler discuss how the company can recover from a high-profile management misfire. (Photo: Getty Images.)

Independent directors did a study of Yahoo's assets and performance in the past two weeks and concluded the company wasn't performing as well as it could, said a person familiar with the matter. The review came after nearly a year of board discussions about Yahoo's flagging performance, and the independent directors ultimately decided a change at the top was the only way to turn things around, according to two people familiar with the matter.

One of these people said Yahoo is open to selling itself to the right bidder.

The board named Chief Financial Officer Tim Morse to be interim CEO while it searches for a replacement for Ms. Bartz.

After 32 months at the helm of the waylaid Internet company, Carol Bartz is out at Yahoo; CFO Tim Morse has been named interim CEO. Were Bartz' turnaround efforts a bust, and what's the future of Yahoo?

The board hasn't hired an executive-search firm or financial advisers to help in a strategic review, but is expected to do so soon, said someone familiar with the matter. The strategic review isn't expected to include an evaluation of whether Yahoo should be put up for sale, but will focus on so-called "organic" growth, including the possibility of acquisitions or partnerships, the person added.

Yahoo is currently bidding to buy video site Hulu LLC and that effort is expected to continue, said another person familiar with the matter.

According to several people familiar with the situation, Ms. Bartz wrote a brief memo to employees Tuesday afternoon saying: "I am very sad to tell you that I've 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 didn't immediately respond to a request for comment.

Yahoo CEO Carol Bartz is being replaced for now by CFO Tim Morse, pictured, until a permanent successor is found. Bloomberg News

The departure of the CEO, who had more than a year left on her contract, underscores how much the Internet industry has reordered itself and how difficult it has been for a first-generation Web company to repel younger competitors.

Yahoo, the No. 1 search engine early last decade and a product of the late 1990s dot-com boom, has in recent years lost ground to Google Inc. and been hurt by social-network firm Facebook Inc. Both are taking away market share in selling online graphical and video ads, a market in which Yahoo previously shone. The number of minutes that U.S. website visitors spend on Yahoo sites per month has dropped 33% since Ms. Bartz's arrival 2 ½ years ago, according to comScore Inc

Yahoo's stock price is flat over her tenure, compared with a more than 60% rise in the Nasdaq Composite Index. Revenue has been largely flat in recent years, and a 10-year search-advertising partnership Ms. Bartz struck with Microsoft Corp. hasn't been successful so far. High-level executives have left in droves.

Some outsiders have viewed Yahoo as a potential takeover target. Earlier this year, media executive Peter Chernin approached Yahoo Chairman Roy Bostock and fellow director Jerry Yang, Yahoo's co-founder, about a possible deal for the site, according to a person familiar with the matter. Mr. Chernin is a former News Corp. president.

Messrs. Bostock and Yang had told him to wait until around December to restart the conversation, this person said. Until recently, Yahoo's board had been planning to wait until after year-end before deciding whether to replace Ms. Bartz, according to people familiar with the situation.

Ms. Bartz's exit comes the same day another high-profile female executive lost out. On Tuesday, Bank of America Corp. eliminated the job of Sallie Krawcheck, who was head of global wealth and investment management.

Yahoo faced challenges long before Ms. Bartz arrived in January 2009 as the third CEO in three years.

Ms. Bartz got some credit inside the company for overhauling the organizational structure and challenging practices she thought were slowing things down. Yahoo generated a profit of more than $1 billion last year.

But some people familiar with the situation at Yahoo contend she compounded long-term issues and frustrated fellow board members through missteps that included mismanaging Yahoo's U.S. ad-sales arm and failing to introduce innovative Web services, and at times didn't appear to have a solid grasp of parts of Yahoo's business. At a meeting with product managers in early 2010, according to one who was present, she said she didn't realize the majority of Yahoo's space for graphical ads resided in its communications services, namely, Yahoo Mail.

Some executives said Ms. Bartz didn't seem to fully appreciate the growing threat posed by Facebook. "Remind me, what's their revenue?" she dismissively told a CNBC interviewer in March 2010 after he suggested Facebook was a competitor.

With Yahoo's revenue flat, shareholders have placed more value on the company's stakes in Yahoo Japan and Alibaba Group Holding Ltd., the China-based online-commerce company, than on Yahoo's own online-ad business.

Ms. Bartz's relationship with Alibaba, in which Yahoo owns a 40% stake worth billions of dollars, has been strained. Earlier this year, Alibaba CEO Jack Ma flexed his power by transferring ownership of one of Alibaba's websites to a separate company he controlled. That hurt Yahoo's share price, even after Yahoo and Alibaba reached a settlement over the incident.

A mother of three and a breast-cancer survivor, Ms. Bartz grew up in a small town in Wisconsin, where she was a high-school homecoming queen. She became a top executive at Sun Microsystems before becoming CEO of Autodesk Inc., which develops software for designers. In 14 years at Autodesk, she increased revenue and the share price. She stepped down in 2006 before being lured to Yahoo's headquarters in Sunnyvale, Calif., three years later.

Mr. Bostock, the chairman, said he wanted to "thank Carol for her service to Yahoo." The board is "committed to exploring and evaluating possibilities and opportunities that will put Yahoo on a trajectory for growth and innovation and deliver value to shareholders," he said.

The Yahoo board will create an Executive Leadership Council to support interim CEO Mr. Morse until a permanent CEO is found.

—Anupreeta Das and Jessica Vascellaro contributed

to this article.

Write to Amir Efrati at amir.efrati@wsj.com and Joann S. Lublin at joann.lublin@wsj.com