Yahoo (s YHOO) has finally found a new chief executive to replace Carol Bartz (who left in a huff) and he is Scott Thompson, who till recently was the president of the PayPal division of eBay (s EBAY.) A surprise candidate, it is not very clear what his strategy is going to be for Yahoo, which as I have often said is on the wrong side of the Internet history. More importantly, all the problems of Yahoo are still there. The board of directors? Pretty much the same guys who were asleep at the wheel as Yahoo was going off track!
The talent exodus is a one-way street — out of Yahoo. Good luck changing that, especially with a booming tech economy with well paying companies like Facebook and Zynga(s ZNGA). The loss of web attention to other web services? A befuddling mobile strategy? Check, check! Still the same. In a note to its clients, Goldman Sachs’ Heath Terry while applauding the move, maintained a “sell” rating on Yahoo.
With the deterioration of Yahoo’s core business – user engagement declining, stagnant email product, lack of substantive mobile strategy – turnaround needs to happen at many levels, including product development, infrastructure improvement, talent retention, and brand building, among others, to return the company to a positive growth trajectory. Revenue has declined for the last 12 quarters and with competition continually innovating in these areas, execution of new strategic initiatives and product improvement could be challenging.
Thompson has a track record of proven success with PayPal emerging as a leader in online payments. The company has over 100mm people that have connected PayPal to their credit card and/or bank accounts, a meaningful technology lead, the trust that’s been built around the brand, and over $3.5 bn in mobile transactions already on the platform. It’s worth noting however, that previous CEO Carol Bartz was viewed as a strong restructuring hire who was overwhelmed by this challenge and the conflicting goals of Yahoo’s board and its shareholders. (Goldman Sachs.)
Amen to that!
Given Thompson’s background — payments — I am not sure how he fits into the overall plan for Yahoo which is supposedly focused on media and advertising. Yahoo’s press release has this bio for Thompson:
Scott Thompson has a record of deep industry experience, having most recently served as President of PayPal with overall responsibility for establishing that company as the leading global online payment service. He previously served as PayPal’s Senior Vice President and Chief Technology Officer. Prior to PayPal, Mr. Thompson was Executive Vice President of technology solutions at Inovant, a subsidiary of Visa formed to oversee global technology for the organization. Thompson was also Chief Information Officer of Barclays Global Investors, where he implemented a new strategic technology platform and global infrastructure. In addition, he worked with Coopers and Lybrand, delivering information technology solutions to leading financial services clients.
From those who know him, he is said to have solid leadership skills and tends to focus on technology — both things Yahoo needs badly. I guess I shouldn’t judge him before him even starting the gig.
Anyway, I wish Thompson a lot of luck and would love to see him succeed. For starters, I would love to see a simple strategy and a plan that he can put on a single-sheet slide and tell the world. He needs to zero in on a few things Yahoo will do and do them well. And more importantly he needs to get rid of the toxic bureaucratic muddling influence of the board by going in for a board overhaul. There is nothing more I would like to see Thompson do than a turnaround and in the process, give the media a real and new candidate for the “CEO of the year” slot for 2012.
17 thoughts on “Brand new CEO, same old messed up Yahoo”
Om, I couldn’t agree with you more. I am baffled by the appointment of Thompson, who doesn’t appear to have any of the qualifications necessary to:
1. Run an online media company
2. Make Yahoo relevant again by catching up to the rest of the web
3. Pull the reigns away from an ineffective yet overconfident board
This appointment is simply a disaster and I can only attribute it to the likelihood that highly qualified candidates wanted nothing to do with the job, leaving Yahoo with very little choice.
Yep, hard to see many top-tier candidates accepting this poisoned chalice.
The day of the mega-publisher is over. Perhaps they can merge with AOL and go extinct together.
Most likely the board [again]talked a lot about maximizing shareholder value
Yeah that really works out according to plan. 🙂
Perhaps his expertise in *payments* is for later this quarter when they chop it up and sell the parts?
And I read last week that China may be making a bid to buy Yahoo – ALL of it. There goes my Yahoo Mail!
If Alibaba and Softbank buy Yahoo they will need somebody on the US side of the business who can execute the spin offs. Later Ebay can merge with the rest of Yahoo, partially financed by Microsoft.
it would be like the 1980s. ITT styled merger of everything into one company. I guess we will have fewer CEO of the year candidates. 😉
> Brand new CEO, same old messed up Yahoo
Yet they still take up a full page of coverage today on sites like techmeme. Just stop talking about them.
Lol/ okay promise I won’t talk anymore today about Yahoo.
Yes, what we need is a simple plan that goes on one sheet of paper. Riiiight. We all know that the real answers to any problem are just a little clear thinking, a simple idea and the guts to go out and make it happen. Hell, Tom Friedman has made his entire career saying this. Every politician that has walked the planet has said this – “just do it!”
Let’s see, Steve Jobs started with Lisa and 35 years later we had the iPhone. Just do it. One sheet of paper. A clear plan.
Oh well, reporters always have a story to write and sell telling people this at least. Oh yeah, Kodak is declaring Chapter 11 they say. Guess they could not put 100 years of history, patents, work, struggle, mistakes, and successes on one sheet of paper anymore.
A bit premature to declare it’s the same old messed up yahoo. At least give the dude time to settle into the job and implement some of his ideas.
If he messes things up then fair enough but it’s far too soon to write him off.
Actually did you read through the post. I said exactly that. I am not going to judge him just yet. The problems of Yahoo have not changed a wee bit – and those are big problems.
About the email product…the only email I get that involves any of yahoo’s email products are spammers who have scarfed up an address to use until it gets reported and shut down.
Unfortunately, yahoo has made it much harder to report spam using yahoo’s addresses. It used to be that you could just send the email and headers to firstname.lastname@example.org and you’d get good service (including feedback). Now they have some web-based form that I haven’t figured out how to use.
What about $1 billion in yearly profits and 700 million users is ‘messed up’?
Revenue in 2008: $7.21 billion.
Revenue in 2009: $6.46 billion.
Revenue in 2010: $6.32 billion.
Revenue for 2011 (estimated): 4.56 billion.
That at a time when ad dollars are shifting online. Yup. Not messed up at all.