Jan. 4, 2012 at 2:29 PM ET
The big question for Yahoo’s new CEO may not be whether he’ll succeed in turning around the struggling web company, but whether he’ll also end up cursing out the board as his predecessor did.
Today Yahoo Inc. announced the appointment of Scott Thompson, president of eBay’s PayPal division, as chief executive, and there isn’t a lot of optimism he or anyone else can bring the company back to Web dominance.
Thompson will take the helm just a few months after the acrimonious ouster of former CEO Carol Bartz. She was given less than three years to turn around the struggling web company by the board of directors, and her inability to boost revenues and stop employee turnover got her fired, in an email no less.
That prompted Bartz, long known for her salty language, to drop the F bomb in interviews about her termination and publicly call Yahoo’s board “doofuses.”
So, is Yahoo’s board a bunch of incompetents for thinking new CEO blood will make the difference for a company left behind by web giants such as Google and Facebook? Or is this the first step in selling off an aging Internet fixture that should have gone to the highest bidder long ago?
“There’s a long road in front of this company,” stressed Colin Gillis, senior technology analyst for BGC Financial. Gillis said he’s reserving his optimism for when he sees a few quarters of revenue growth or at least the articulation of a plan to turn the company around.
Gillis, who sat in on a conference call with Thompson Wednesday, said he was disappointed the new CEO shared no concrete strategies. “It would have been nice to hear something,” he noted. Furthermore, he said it appeared the board’s decision was rushed and speculated that many more qualified executives weren’t interested in the gig because “it’s not going to be easy.”
Rob Enderle, technology analyst for Enderle Group, also saw the board’s choice as faulty. “It looks like they’re repeating the same mistake,” he said.
Yahoo’s board, he continued, appears to have used the same criteria in selecting this CEO as they did when they hired Bartz in 2009. “They ended up with somebody who was a good sustaining manager but came from a company that had no background that was similar to what Yahoo did; and she didn’t do well,” Enderle said.
Now with Thompson, it’s déjà vu all over again. “He has the PayPal background and the company was relatively well run, and he made it better,” Enderle pointed out, “but it’s a banking Internet property and Yahoo is more of an Internet publishing house.”
The one plus, he added, is Thompson’s financial background. Before joining Paypal, Thompson worked for Inovant, a subsidiary of Visa. He may be able to build a better package for a possible Yahoo sale down the line than his predecessor.
Google, Microsoft, and Yahoo’s Asian Partner Alibaba Group have all reportedly been interested in buying Yahoo. (Msnbc.com is a joint venture of Microsoft and NBCUniversal.)
Bartz had a strained relationship with Yahoo’s Asia partner, Alibaba Group, and that impeded success for the China-based partner. But according to a story in the Wall Street Journal Wednesday, Thompson has had his share of issues with Alibaba at PayPal. The company stopped providing its electronic payment services to Alibaba after Alibaba nixed a PayPal rate increase, according to the Journal.
As far as Yahoo’s Asian assets in China and in Japan, Josh Brown, an analyst with Fusion Analytics Investment Partners, said the company should sell off those assets and use the money to grow the business.
Brown called Thompson’s appointment “an interesting choice” and believes it’s actually a good sign he didn’t come from a media company. “Yahoo is not a media company even though it may like to think of itself as one. They need to be more of a utilitarian company,” he stressed, adding that the future is in social media and search. “At the end of the day content is not a great business.”
Thompson may be the right person to refocus Yahoo, which still has about 700 million users, if that’s the ultimate goal, Brown maintained. “They brought in a guy who is a true Web geek,” he said.