Carol Bartz’s departure as Yahoo’s CEO isn’t going to be enough to pacify many Yahoo shareholders, and there’s even been a call for a few other choice board members.  The decision left investors and analysts questioning the company’s future strategy, raising doubts about the board’s competence as well.

Third Point LLC, the multi-billion dollar hedge fund and a large shareholder of Yahoo with a 5.1 percent stake, attacks Yahoo’s board in a filing with the Securities and Exchange Commission (SEC).

“This letter details our principled demands for sweeping changes in both the Board of Directors and Company leadership, and outlines the hidden value of Yahoo, which has been severely damaged but not irreparably by poor management and governance,” said Third Point CEO Daniel Loeb in a letter to Yahoo Chairman Roy Bostock.

In the letter Third Point demanded board member Bostock and fellow Directors Arthur Kern and Vyomesh Joshi to step down.  The investment firm said today in a filing, “It is time that certain members of this Board were held accountable for its past failures and their individual roles. Accordingly, we insist that Mr. Bostock, who championed Ms. Bartz’s hiring and led the charge against the Microsoft deal, promptly resign from the Board. We also demand that fellow Directors Arthur Kern and Vyomesh Joshi, who have stood by silently during these last five years of woeful performance, join Mr. Bostock in resignation.”

Yahoo Chairman Roy Bostock fired CEO Carol Bartz over the phone earlier this week over growing concerns on Yahoo’s declining users and advertising revenue, as rivals Google and Facebook continue to expand on both fronts.  Bartz served as President and CEO of Yahoo from January 2009 until September 6, 2011.

Though Bartz was hired to help revive Yahoo’s sales growth and stock price, she had made some alarming decisions in her tenure, including her handling of Yahoo’s stake in Alibaba and Yahoo Japan.  She publicly fought with Alibaba Group CEO Jack Ma, which led Ma to disinvest the company’s most valuable payment tool assets, Alipay, without compensating Yahoo shareholders.  She also failed to improve revenue growth. But on positive side, Yahoo’s stock has gained 6.7 percent during Bartz tenure.  Yahoo’s shares have jumped almost 12 percent after the departure of Bartz.

In her first interview after she was fired, Bartz blasts Yahoo’s board members. “They want revenue growth,” says Bartz about the Yahoo board, “even though they were told that we would not have revenue growth until 2012.”

“The board was so spooked by being cast as the worst board in the country,” Bartz told Fortune. “Now they’re trying to show that they’re not the doofuses that they are.”

Rebuild or sell?

If Yahoo’s board does want to sell, it won’t be an easy to task for them to find the right buyer.  Yahoo is still a $17 billion market capitalization company, and after their failed talks with Microsoft’s buy out in 2008, it would be difficult for another company to take on what seems to be a sinking ship.   However, several analysts think Microsoft would reconsider picking up the company again to gain a bigger online platform. Yahoo is still in partnership with Microsoft on search and advertising.

“I’m sure the Microsoft offer of $31 per share a few years ago is looking pretty good today,” said Dan Olds, an analyst with The Gabriel Consulting Group. “And Microsoft might still be interested in Yahoo – at a vastly lower price, that is. I don’t know if there are any other players who have both the money and the desire to buy something as big as Yahoo.”

Despite all the controversy, Yahoo shares rose over 12 per cent on Wall Street.  Bostock, after Bartz’s departure, said a “comprehensive strategic review” of the company was underway.  And here Klint Finley looks at the potential candidate for Yahoo’s top job.