ShareThis Page
Business

Yahoo picks exec from PayPal as CEO after 3 flops

| Thursday, Jan. 5, 2012

SAN FRANCISCO -- Yahoo's previous turnaround attempts have flopped under three leaders with dramatically different backgrounds: former movie mogul Terry Semel, beloved Yahoo co-founder Jerry Yang and profanity-spewing Silicon Valley veteran Carol Bartz.

Now the struggling Internet company is making yet another unorthodox choice with Wednesday's announcement that it has lured away Scott Thompson from a lower-profile job running eBay's thriving PayPal service to step into the pressure-packed position as Yahoo's fourth CEO in less than five years.

The appointment raised questions among analysts, since Thompson, 54, has no experience in online content and advertising, Yahoo's chief sources of revenue. The timing of Thompson's hiring also came as a surprise, given that Yahoo's board has been considering a sale of all or part of the company since firing Bartz four months ago.

With Thompson's selection, Yahoo's board is signaling that it believes the company can still rebound, despite several years of losing ground to Google and Facebook in product innovation and online advertising.

Even so, a sale of Yahoo's most prized assets -- its investments in Yahoo Japan and China's Alibaba Group -- is likely. Softbank Corp., Yahoo Japan's largest shareholder, and Alibaba Group have proposed buying back most of Yahoo's holdings in the Asian companies in a deal valued at $17 billion, according to published reports.

Yahoo Chairman Roy Bostock dismissed recent speculation that Yahoo might team up with buyout firms to take the company private.

"It has not been on our radar screen," he said yesterday. "I think it's a moot issue from my point of view."

Thompson's job will be to revive Yahoo's revenue growth and repair the company's fractured relationship with investors fed up with a litany of broken turnaround promises.

Yahoo's stock has not traded above $20 in more than three years. It dropped 51 cents, or 3 percent, yesterday to close at $15.78.

"There is no shareholder or investor who will be less patient than me," said Thompson, a Boston native who still has his hometown accent 18 years after moving to California. "We have got to be able to grow this business. There is no question that is priority No. 1."

Thompson's predecessors embraced a similar agenda with mostly dismal results.

Analysts estimate Yahoo's revenue last year totaled about $5 billion, down from nearly $7 billion in 2007. During the same span, Google's revenue soared from $17 billion to an estimated $38 billion.

Thanks largely to cost-cutting measures imposed by Bartz, Yahoo has become more profitable. Last year, it earned an estimated $1.1 billion, up from $660 million in 2007.

Still, investors are disappointed with the downturn in revenue at a time when advertisers are spending more money on the Internet.

TribLIVE commenting policy

You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.

We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.

While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.

We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers

We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.

We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.

We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.

We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.

click me