“It has been my privilege to serve Yahoo stockholders and I remain confident in the company’s future,” Hart said in a statement distributed Tuesday by IGT.

Yahoo Inc. thanked Hart for serving on its board since June 2010 and wished her luck.

Pleasantries aside, Yahoo’s own board probably wanted Hart to leave down, said Gene Grabowski, an executive vice president at Levick Strategic Communications, which works with companies facing crises.

“In a crisis, sometimes there are circumstances where you have to make a sacrifice to the gods. This appears to be one of them,” Grabowski said of Hart’s departure from the board.

Hart, 56, becomes the sixth Yahoo director to depart the board since the company hired Thompson to engineer a turnaround. The exodus will leave Yahoo with nine directors.

IGT Chairman Philip Satre said IGT’s board urged Hart to leave Yahoo in order for her to avoid being distracted.

The turmoil swirling around Yahoo is likely to escalate. A dissident shareholder who is seeking to shake up the board even more is demanding access to internal records about Thompson’s hiring. And Yahoo’s board is conducting its own investigation into why no one flagged an inaccuracy that has been appearing in Thompson’s bio for years.

At various times, published summaries of Thompson’s academic background have included a computer science degree from Stonehill College that he never received. Thompson graduated from Stonehill, a Catholic school near Boston, in 1979 with a bachelor’s in accounting, an accomplishment that Yahoo correctly listed in his bio.

Those earlier inaccuracies have raised questions about whether Thompson deliberately allowed the misinformation to perpetuate and why Hart didn’t insist on a more thorough background check before Yahoo hired him.

After Thompson joined Yahoo, the non-existent degree appeared on his bio on Yahoo’s website and in documents filed April 27 with the Securities and Exchange Commission.

“It’s pretty clear that there was information that slipped through Yahoo’s fingertips and someone has to be held accountable,” said Gayle Mattson, an executive vice president for executive search firm DHR International.

Hart’s plans to leave Yahoo’s board were first reported by All Things D, a technology blog affiliated with The Wall Street Journal.

Several experts on corporate ethics and governance have predicted Thompson is likely to lose his job because of the uproar over the fabricated college degree.

An activist hedge fund trying to gain four seats on Yahoo’s board already had been calling for the company to jettison Thompson and Hart. Hart laid out her exit strategy after the hedge fund, Third Point LLC, launched its attempt to review Yahoo’s internal records so it can learn more about the Thompson’s hiring.

In a memo sent Monday to Yahoo’s employees, Thompson apologized for the distractions caused by the furor over his inaccurate bio. But he didn’t offer an explanation on who was responsible for the deception. He also promised to cooperate with the investigation by Yahoo’s board.

After announcing its plans for the inquiry last week, Yahoo provided more details on Tuesday about who will oversee the investigation. The probe will be handled by a committee of three directors who joined the company’s board after Thompson’s hiring.

Alfred Amoroso, a veteran high-tech executive, will lead the committee, which also will include John Hayes, American Express Co.’s chief marketing officer, and Thomas McInerney, former chief financial officer for IAC/InterActiveCorp. Los Angeles lawyer Terry Bird will serve as the special committee’s independent counsel.

The investigation will review whether Thompson ever lied about his academic credentials, as well as Yahoo’s own internal controls.

Besides skewering Hart for shoddy research into Thompson’s background, Third Point blasted her for an inaccuracy about her own academic history.

Hart’s bio had claimed she held a bachelor’s degree in marketing and economics. After being confronted by Third Point, Yahoo clarified that Hart graduated from Illinois State University with a bachelor’s degree in business administration with specialties in marketing and economics.

IGT also said Hart holds a bachelor’s degree in marketing and economic in a recent SEC filing.

“After a thorough review, the IGT board of directors has found no material inconsistencies in Patti Hart’s academic credentials,” Satre said.

Thompson only has an accounting degree from Stonehill College, an accomplishment that Yahoo also listed in the filing. The accounting degree was the only one listed in Thompson’s resume last year by eBay Inc. when he was still running that company’s PayPal payment service. He graduated in 1979, according to Stonehill’s website.

Yahoo confirmed Thompson’s credentials had been exaggerated in the recent filing with the Securities and Exchange Commission. The company, which is based in Sunnyvale, California, brushed off the distortion as an “inadvertent error.”

But Loeb pounced on the misinformation as a violation of Yahoo’s code of ethics and called for an independent investigation to determine whether Thompson had misled the company’s board about his technology credentials. He also cited the mix-up as an example of Yahoo’s poor corporate governance.

“If Mr. Thompson embellished his academic credentials we think that it 1) undermines his credibility as a technology expert and 2) reflects poorly on the character of the CEO who has been tasked with leading Yahoo at this critical juncture,” Loeb wrote in a letter to Yahoo’s board on Thursday. “Now more than ever Yahoo investors need a trustworthy CEO.”

In the past, other companies have suspended or fired executives who were caught lying on their resumes.

Yahoo hired Thompson to reverse years of financial lethargy that set in at the company even as more advertising shifted to the Internet. The funk has weighed on Yahoo’s stock, which has been hovering between $10 and $20 for most of the last three years. Yahoo shares fell 27 cents to close at $15.40 on Thursday. That’s well below the $33 per share that stockholders could have gotten in May 2008 if the board had accepted a takeover offer from Microsoft Corp.

The company stood behind Thompson in its statement. “This in no way alters that fact that Mr. Thompson is a highly qualified executive with a successful track record leading large consumer technology companies,” Yahoo said. “Under Mr. Thompson’s leadership, Yahoo is moving forward to grow the company and drive shareholder value.”

Tensions between Loeb and Thompson escalated since late March when Yahoo appointed three new directors to its board. In doing so, Yahoo snubbed Loeb, who had been lobbying for a board seat along with three allies who he believes have the skills necessary to help Yahoo rebound from its long-running struggles. At the time, Thompson made it clear that he and the Yahoo committee overseeing the search for new directors had concluded Loeb wasn’t the best candidate.

Loeb is waging a campaign to persuade Yahoo’s shareholders to elect him and his allies to the board at the company’s annual meeting. The date of that meeting still hasn’t been set.

Besides ripping Thompson, Loeb also sought to discredit Patti Hart, one of the Yahoo directors he wants bounced from the board. Hart led the committee that recommended Yahoo’s new appointments to the board.

In his letter, Loeb noted that Yahoo’s recent SEC filing says Hart holds a bachelor’s degree in marketing and economics from Illinois State University. In its response, Yahoo clarified Hart received a bachelor’s degree in business administration with specialties in marketing and economics.

Thompson, 54, has mostly cut costs to boost profits since taking over as Yahoo’s CEO. Last month, he laid off about 2,000 employees, or 14 percent of the workforce, in the biggest payroll purge in Yahoo’s 17-year history. He also disclosed plans to close about 50 Yahoo services that haven’t been attracting enough users or generating enough revenue.

He has made modest progress on other financial fronts. Yahoo registered its first year-over-year increase in quarterly net revenue since 2008 during the three months ending in March.

Even though he doesn’t have a computer science degree, Thompson has a background in technology. He served as PayPal’s chief technology officer for three years before being promoted to the payment service’s president in 2008. He also previously worked as chief technology officer at credit- and debit-card processor Visa USA.

She also could still reap a windfall from 5 million stock options that she received when the company hired her in January 2009. None of those 5 million options have vested because Yahoo’s stock hasn’t yet hit any of the required price targets.

Retaining the rights to that restricted stock and stock options means Bartz has a huge incentive to root for her successor, Scott Thompson, to come up with a turnaround plan that lifts Yahoo’s long-slumping shares.

Yahoo disclosed in previous filings with the Securities and Exchange Commission that Thompson is starting his first year as CEO with a pay package likely to be valued at $27 million to $28 million, depending on the size of his bonus.

Most companies set the date for their annual shareholder meetings when they file the documents detailing their executives’ compensation. But Yahoo didn’t do that because it is facing a challenge to its board of directors from one if its largest shareholders, hedge fund Third Point.

The fund’s manager, Daniel Loeb, is seeking a board seat for himself and two allies who contend they would serve shareholders better than Yahoo’s appointees. Yahoo contends it already has ushered in a new era by adding six directors, including Thompson, since the beginning of the year.

Company co-founder Jerry Yang left the board in January, and four other directors, including Chairman Roy Bostock, intend to step down whenever the annual meeting is held.

The last time Yahoo faced a disgruntled shareholder’s attempt to shake up its board in 2008, it delayed the meeting until August. The company, which is based in Sunnyvale, Calif., usually holds its annual meeting in late June.

Bartz’s inability to snap Yahoo out of its financial funk is one of the reasons Loeb and other shareholders are frustrated. Despite her foibles, Bartz received compensation packages valued at nearly $76 million in all during less than three years as CEO.

Last year’s package of $16.4 million represented a 37 percent increase from 2010′s package of $11.9 million.

In 2009, Bartz ranked among corporate America’s best-paid CEOs with a package valued at $47.2 million.

Most of her pay has hinged on Yahoo’s stock price. For instance, Yahoo estimated the 5 million unvested stock options that Bartz received in 2009 could eventually be worth $27.2 million.

But they won’t vest unless Yahoo’s reaches at least one of several goals before 2013. About one-third will vest if Yahoo’s closing stock price averages at least $17.60 for 20 consecutive trading days. The rest of the options will vest at average prices from $20.53 to $35.19.

Yahoo shares added four cents Friday to close at $15.57. The stock hasn’t traded above $20 since September 2008.

Even if the 5 million options never vest, Bartz has prospered from other grants that she received during her rocky tenure. For instance, last year she realized a $6.5 million gain by exercising more than 462,000 other stock options that had vested, according to Friday’s filing.

She also received $735,025 in salary in 2011, along with a $477,534 pro-rated cash bonus.

The documents also disclosed that one of Bartz’s top lieutenants, Blake Irving, will receive a $4.9 million severance package when he leaves the company as chief product officer at the end of this month. Irving qualified for the package as of Dec. 31.

The Associated Press formula calculates an executive’s total compensation during the last fiscal year by adding salary, bonuses, perks, above-market interest the company pays on deferred compensation and the estimated value of stock and stock options awarded during the year. The AP formula does not count changes in the present value of pension benefits. That makes the AP total slightly different in most cases from the total reported by companies to the Securities and Exchange Commission.

The value that a company assigned to an executive’s stock and option awards for 2011 was the present value of what the company expected the awards to be worth to the executive over time. Companies use one of several formulas to calculate that value. However, the number is just an estimate, and what an executive ultimately receives will depend on the performance of the company’s stock in the years after the awards are granted. Most stock compensation programs require an executive to wait a specified amount of time to receive shares or exercise options.

That could have meant authors writing their next novels and employees collaborating on spreadsheets with confidential data would find all that suddenly belonging to Google.

As it turns out, the worries are probably unfounded.

The language is actually standard legalese to give Google the licensing rights that it needs to deliver on the services that users request.

The way that Google keeps documents in its data centers requires the company to obtain a license to “host, store (and) reproduce” the files. When a co-worker needs to read a document in a different language or even make minor revisions, Google needs the rights for “translations, adaptations or other changes.”

Even the everyday occurrences such as someone watching a video or pulling up a text file at an Internet cafe requires Google to retain permission to “publicly perform” or “publicly display” such content.

That doesn’t mean Google will take a screenwriter’s work in progress and produce a movie off it, even though the legal language might make it seem as if Google could.

“Our terms of service enable us to give you the services you want — so if you decide to share a document with someone, or open it on a different device, you can,” Google said in a Wednesday statement.

The hubbub still may do some good by prodding more people to read the rules governing Internet services such as Google Drive more carefully before signing up, said Corynne McSherry, an attorney specializing in intellectual property for the Electronic Frontier Foundation, a digital-rights group in San Francisco.

She said she also hopes the publicity causes more people to ponder other potential pitfalls, such as privacy abuses and security breaches, before deciding to keep their digital content in a storage locker at Google Drive or similar services. As the owner of the Internet’s dominant search engine, Google has faced increasing scrutiny over the trove of data it gathers about Web surfers and how it uses the information to tether ads to people’s personal tastes and hobbies.

Even discerning readers of the legal disclosures known as “terms of service” can still be flummoxed by some of the turbid language.

That seems to have contributed to the misperceptions about Google’s designs on the content that will be kept in its storage service.

The confusion centered on a passage advising that anyone uploading or submitting content to Google Drive will be granting Google “a worldwide license to use, host, store, reproduce, modify, create derivative works (such as those resulting from translations, adaptations or other changes we make so that your content works better with our Services), communicate, publish, publicly perform, publicly display and distribute such content.”

As those words circulated on the Internet, the fears about Google Drive undermining intellectual property rights mounted.

It was troubling enough for The New York Times, the third-largest U.S. newspaper, to send out a note discouraging the roughly 1,000 employees in its newsroom from storing files on Google Drive until there’s a better understanding of the intellectual property issues and how the service works.

The uproar might have died down if more attention had been paid to a straightforward statement leading up to the paragraph that set off the alarms.

“Some of our services allow you to submit content,” Google says in its disclosure. “You retain ownership of any intellectual property rights that you hold in that content. In short, what belongs to you stays yours.”

Another fine point was largely glossed over in the fuss over Google Drive. The same terms have applied to dozens of other Google services, including Gmail, since March 1. Documents and photo are frequently sent as email attachments and stored on Gmail, yet there hadn’t been any major concerns raised about that material becoming Google’s intellectual property.

The passage granting Google licensing rights to content transferred or stored on tis services is fairly common among Internet services, McSherry said. The licensing requirements are “an artifact of copyright laws that no longer work in our modern world rather than any evil intent on Google’s part.”

Microsoft Corp.’s rival storage service, called SkyDrive, also imposes a content licensing agreement similar to Google Drive.

Dropbox Inc., a rapidly growing storage service, tells users that “we may need your permission to do things you ask us to do with your stuff, for example, hosting your files, or sharing them at your direction …. You give us the permissions we need to do those things solely to provide the services.”

Like Google Drive, both SkyDrive and Dropbox stress that content stored on their services remains the property of the user.

Netflix has spent 13 years learning viewers’ disparate tastes so it can point out movies they might enjoy. It has become good enough to figure out which romantic comedies might still appeal to subscribers who favor action flicks.

Netflix says three-quarters of what people watch now come from such recommendations. But as subscribers shift from getting DVDs through the mail to the instant gratification of Internet viewing, Netflix needs to make those suggestions even better.

The goal now is to learn individual viewing preferences so well that every recommendation is a hit with that subscriber, says Ciancutti, Netflix’s vice president of product engineering.

If Ciancutti can get the system right, Netflix can direct people to movies and TV shows it already has. That will keep customers happy and help limit how much Netflix has to spend to obtain rights to additional online video.

If he gets it wrong, customers will be more inclined to search for something and become frustrated when they can’t find it. That’s a real concern because Netflix’s online library doesn’t offer as comprehensive a video selection as the DVD service the company wants to phase out.

“We are using all of our best ideas right now, but I know a year from now, I am going to be looking back and saying, ‘Oh wow, we didn’t have this feature or that feature,’ and I will be really embarrassed,” Ciancutti says.

Ciancutti invented Netflix’s original recommendation system, which was mostly based on the ratings of customers willing to share their opinions about DVDs.

When he first started out, Ciancutti just wanted to come up with a system that didn’t recommend DVDs in short supply or movies that a subscriber had already watched. The recommendations have become progressively more sophisticated as more people signed up for Netflix and engineers got more data to crunch and feed into its computer formulas.

But the company’s engineers always realized they weren’t getting a complete picture. Those discs may have sat around for weeks or might not have ever been watched in their entirety. And many customers have never bothered to rate movies.

Ciancutti believes the recommendations should get better now that more people are turning to online viewing. Since Netflix introduced its streaming option five years ago, billions of hours of video have been watched to give the company’s engineers more insight into how and when customers use the service.

With streaming, Netflix no longer needs customers to give feedback. Its computers log whether someone mostly watches comedies on weekends and dramas after work, and whether the entire movie gets watched. It knows which customers tend to devour multiple episodes of TV comedies in a single viewing session. It can tell whether someone tends to rewind movies when certain actors appear.

“The signals we are getting about what people are watching, when they are watching and how much they are watching are much richer than ever before,” says Neil Hunt, Netflix’s chief product officer.

But the science remains imperfect.

Netflix subscriber Sanchita Gupta still gets confounded by some of the suggestions after eight years as a customer.

“The recommendations are OK, but sometimes they are completely off the mark,” Gupta says. “Just because we watched ‘Office Space’ doesn’t mean we want to see ‘Austin Powers.’ I think those are two very different comedies.”

Netflix learns from those misses.

“When you are running as fast as we are, I want us to fall on our fanny sometimes,” says Yellin, a former filmmaker who is Netflix’s vice president of product innovation. “You get better by grinding out the improvements one yard at a time.”

If Netflix can deliver more accurate recommendations, it will have an even better chance to fend off smaller streaming rivals, including Amazon.com Inc., Wal-Mart Stores Inc.’s Vudu and a forthcoming venture backed jointly by Verizon Communications Inc. and rival DVD rental service Redbox.

Competitors don’t know as much about viewers’ preferences because they haven’t been analyzing them for as long as Netflix Inc. The Los Gatos, Calif., company has accumulated more than 8 billion ratings on a one- to five-star scale since it began working on its recommendation system in 1999.

“It’s a significant advantage, and it will be difficult for competitors to catch up,” Piper Jaffray analyst Michael Olson predicts.

Netflix subscribers are still rating millions of DVDs each month. That system works fine for DVDs, but that’s becoming less of a concern for Netflix at it tries to wean customers off the discs, which are expensive to mail back and forth.

Internet video is cheaper to deliver, but it comes with up-front investments. The costs of obtaining online rights for limited time periods are higher than buying DVDs, which can be rented out indefinitely. Movie and TV studios have been steadily raising their online licensing fees as video streaming cascades into more households.

Netflix already has signed contracts requiring it to pay nearly $4 billion for online licensing over the next several years. That rising cost is the main reason Netflix expects to lose money this year for the first time in a decade. It’s also a big reason Netflix raised U.S. prices by as much as 60 percent last summer, resulting in a consumer backlash.

Netflix’s promise not to further raise prices increases pressure on the recommendation system. The company already has accumulated more than 140,000 movies and TV episodes on DVDs, compared with an estimate of more than 60,000 titles for online streaming. Customers are less likely to notice that gap if they keep seeing recommendations that appeal to them.

Gupta’s experience exemplifies the phenomenon. When she searches for something to watch, she often becomes disappointed with slim pickings in suspense and mystery. But she sticks with Netflix because 80 percent of the time, she and her husband find something they want to watch from Netflix’s recommendations.

Netflix’s computer formulas now sort subscribers into one of thousands of clusters created by Netflix to distinguish certain viewing patterns.

This process starts as soon as a customer signs up and fills out a 22-question survey. The responses are tied to the viewing preferences of existing subscribers who had given similar answers. If it turns out those existing subscribers watched and liked “The Big Lebowski,” then the new customer might, too, even if comedies weren’t a stated preference on the survey.

The data analysis also customizes Top 10 lists for each of Netflix’s online video subscribers.

As Netflix learns more about each subscriber, the suggestions aim for even narrower targets. Netflix does this by breaking down its recommendations into esoteric categories such as “Emotional period pieces featuring a strong female lead” and “Critically acclaimed, gritty foreign movies.”

“Some of this is what I call ‘kitchen engineering,’” Yellin says. “We throw in a little bit of salt, a little bit of pepper, a little bit of lemon juice and see if it works.”

Netflix has always looked for new ingredients to cater to the specific tastes of different viewers. For instance, it once offered $1 million to any engineering team outside the company that could use its viewing data to improve the recommendation system by at least 10 percent. The contest drew about 50,000 participants, and the winning team took nearly three years to get there.

Netflix is trying to make improvements far more quickly these days, striving to reach a goal that could fit into the category of “Far-out fantasies featuring computer-coding geeks.”

“My Utopian state would be for us to understand our subscribers so well that we can eventually just put one recommendation on the screen with nothing else there but a play button,” Yellin says.