Activist Yahoo shareholder and hedge fund manager Daniel Loeb brought the truth about Thompson to light, discovering that the CEO did hold the financial degree he claimed on his resume, but not the computer science one. Normally, one would think that Thompson’s experience would make this a non-issue. As Greg Stirling pointed out, “he had many years of experience as a successful tech executive in Silicon Valley…the paper was a technicality of sorts – not to minimize the ethics issue.”
Apparently it’s the ethics issue that Loeb couldn’t abide. He pushed hard, not letting the issue die; it became a big public relations headache for the beleaguered media company. In addition to effectively winning Thompson’s resignation, Loeb gained seats for three of the four people on his slate for Yahoo’s board of directors. Loeb himself will take one of the seats; Loeb’s other two winning nominees include media executive Michael Wolf and turnaround specialist Harry Wilson.
With everything that Yahoo has been through, it hardly seems that matters could get any worse for the company. Shortly before the scandal, Thompson laid off 2,000 workers – about 14 percent of Yahoo’s headcount – as part of his plan to change the firm’s direction. He wanted to move Yahoo away from its historical emphasis (some would say “over-dependence”) on display advertising and shift focus toward data and personalization. One wonders how those Thompson laid off must feel now – to say nothing of those who kept their jobs!
That appears to be almost beside the point now, as Yahoo’s new interim CEO boasts a background very different from Thompson’s. Ross Levinsohn served as president of Fox Interactive Media before coming to Yahoo. He offers a strong advertising and media-focused perspective; he’s also popular at the company. Jason Hirschhorn, a former MTV digital executive, notes that Levinsohn is “well-respected in the Valley, Hollywood and on Madison Avenue…Yahoo has to lean into media and he has the plan.”
But does Levinsohn really have a plan for navigating Yahoo through this crisis? Thompson barely got a chance to put the first stage of his own plan into action. Kara Swisher posted the first memo from Levinsohn to Yahoo’s rank and file after accepting the interim CEO position. It’s hard to get anything substantial from a first message, of course. Still, the tone of that note sounds very much like he wants to revitalize the company while moving in its original, advertising-focused direction rather than change things in the way Thompson planned.
Taking a look at Levinsohn’s background, reputation, and history of on-the-job accomplishments, Peter Kafka at AllThingsD made two predictions. First, he expects Levinsohn to try to revitalize Yahoo’s ad business. The executive spent most of 2011 trying to shore up that business and bring back the company’s glory days, when Yahoo had one of the web’s best sales operations. Levinsohn put those efforts on hold when Thompson became CEO, but now that he’s in the captain’s chair, Kafka thinks he’ll try to restart those efforts.
Second, Kafka pointed to Levinsohn’s reputation as a negotiator and deal-maker (he helped News Corp. buy MySpace back in 2005) as a sign that Yahoo will probably get involved in some merger and acquisition deals. The company can’t bring a huge war chest to bear for this, unless Levinsohn can sort out the morass of Yahoo’s Asian holdings and turn a nice profit. Kafka thought Levinsohn might make a play for Hulu; it’s a deal he’s wanted to work before, but then-CEO Carol Bartz wouldn’t go for it. If he can’t acquire Hulu, “I don’t see him chasing after Instagram-like companies with big price tags and no near-term revenue plans,” Kafka muses. “I do see him making some plays on cheaper start-ups, as well as some technology plays, to shore up/replace the company’s very old infrastructure /platforms.”
These moves might help Yahoo. Will they be enough to reverse the company’s trend of losing market share? A large organization like this could continue on a downward spiral for years; indeed, Yahoo already has. I would like to see it recover, but I’m finding it difficult to believe that an approach some observers have dubbed “back to the future” will halt, let alone reverse, the company’s painfully fascinating slow-motion train wreck. I’ve been wrong before, though, and I wouldn’t mind being proven wrong again.