Sunday, May 13, 2012

Thompson out, Levinsohn in as another Yahoo! CEO bites the dust

As if you expected any differently, the Yahoo! soap opera continues, with CEO Scott Thompson ousted over the "resume errors" that led a major shareholder to demand his resignation. Thompson had been CEO for just four months.

The Yahoo! Board of directors named Fred Amoroso Chairman of the Board. He then decided who should lead Yahoo!, at least for now. With that, Ross B. Levinsohn, the company’s head of global media has become interim CEO.

The flap that took down Thompson came when Third Point CEO Daniel Loeb and his hedge fund pointed out an error in Thompson's credentials: he does not have a college degree in computer science as was stated both on Yahoo's website and in a recent regulatory filing. The dust-up started just over a week ago.

Levinsohn, most believe, would like to keep the CEO role on a continuing basis, and the board is probably considering this an audition, as well. Anything to do with being the CEO of Yahoo! can only be called challenging, and only if one wanted to understand the difficulties.

Levinsohn has been with Yahoo since late 2010, when the then CEO, Carol Bartz, hired him in to lead Yahoo!'s Americas operations. Currently, Levinsohn is the company’s global head of media. In that position, he oversees Yahoo!'s core multibillion dollar advertising business.

In addition to these changes, the Board of Directors came to a "settlement" with Third Point, which has been demanding greater representation on the Yahoo! board. As a part of the Board’s agreement with the hedge fund, Third Point CEO Daniel S. Loeb, along with Harry J. Wilson and Michael J. Wolf are joining the Yahoo! Board.

In addition, Yahoo! said that in order to "accelerate the leadership transition," the members of our Board who were not planning to stand for re-election are stepping down, in advance of Yahoo's annual meeting.

Although it was initially believed Yahoo! would wait until the work week, Monday, to make the announcement, the company issued a press release on Sunday, announcing the changes.

It seems obvious that this FUBAR will distract Yahoo! from its recovery efforts for some time. Jeff Kagan, an independent technology analyst said "Yahoo has been struggling over recent years and this new incident only makes matters worse for the company."

He also added the fairly obvious, predicting that "this CEO mess is going to leave Yahoo all tied up for at least several more quarters."

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