[View the story "Yahoo CEO watch: Levinsohn alone on deck" on Storify]

Yahoo CEO watch: Levinsohn alone on deck

Ross Levinsohn has been interim CEO of Yahoo for nearly two months while the board conducts a search for the right person to succeed ousted CEO Scott Thompson. That should be ending any day now.

Storified by Staci D Kramer · Fri, Jul 06 2012 16:57:26

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• Social media in Q1: commerce and discovery dominated
• Sector RoadMap: Content personalization in 2013
• Social first-quarter 2013: analysis and outlook

Now that Yahoo has managed to make its way through yet another CEO shuffle — its sixth in just five years — the former portal has to get back to the main task at hand: namely, figuring out what its future looks like. By replacing Scott Thompson with Ross Levinsohn, who currently runs Yahoo’s global media business and used to be a senior executive at News Corp., the company seems to be indicating that it wants to focus (again) on being a media player. But does Yahoo even have what it takes to succeed as a new-media entity? There are plenty of reasons to be skeptical, and the company’s knowledge gaps are not going to be easy to fill.

The news that Levinsohn had been elevated to the top spot sparked a lot of favorable reactions from those in the media and tech sphere. Although some observers — including former Adweek editor and author Michael Wolff — seemed less than enthusiastic about his abilities, others such as former Myspace president Jason Hirschhorn were much more positive, saying the company couldn’t have made a better choice. Many pointed to his purchase of Myspace while at News Corp. as a sign that Levinsohn is both a forward thinker and willing to make big acquisitions to further those goals (Myspace’s decline into irrelevance began after Levinsohn left the company, his supporters say).

Media is no longer about who has the most eyeballs

But while seeing Myspace as an opportunity in 2005 may be a mark in Levinsohn’s favor, some of what the new CEO has said about Yahoo both before and since he took the position raises questions about where he sees the company going as a digital-media entity. In a memo to the troops in the wake of Thompson’s departure, he said Yahoo was “achieving genuine and meaningful successes in the marketplace every day and heading in the right direction,” and in an interview with paidContent last year he said:

Yahoo is the premier digital company in the world and embracing that isn’t a hard thing to do. That’s just fact-based. Tell me what other type of media can sit with you and say ‘I’ve got the top 19 #1 or #2 newspapers, I’ve got the top 20 shows, I’ve got the 19 of the top 20 radio stations, 19 of the top 20 magazines’?

But does that mean Yahoo is well-positioned to be a media player for the next decade, rather than the past one? That’s not entirely clear. Levinsohn seems to think having a huge number of eyeballs aggregated around Yahoo’s various properties is a sign of success, but that’s arguably not what media companies of any kind ought to be concentrating on right now. Increasingly, advertisers don’t want hundreds of millions of eyeballs to show banner ads to anymore. They want targeted reach and they want mobile and they want social, and there aren’t a lot of signs that Yahoo has what they need.

In an interview on Friday at Harvard, the head of Google’s news division — former Salon CEO Richard Gingras — compared newspapers to Yahoo and not in a good way. He said newspapers have suffered from the same kind of problems portals like Yahoo have since the social Web started changing the landscape: Namely, they are still operating on the assumption that aggregating a lot of miscellaneous content together in one digital bundle is what readers and advertisers want. But that is not the case.

Where is Yahoo’s social or mobile strategy?

Google may not have solved the issue of adding social signals and features to its business, but at least the launch of Google+ has been a credible attempt in that direction. Does Yahoo even have a social strategy? Not long after it gave up on the search business and handed that responsibility over to Microsoft, the company effectively admitted defeat on the social end of its media operations by integrating with Facebook. Is that the beginning and end of its ambitions when it comes to adding social features to its business? If it is, then Yahoo is going to have a big problem on its hands.

Mobile is another aspect of a modern media strategy where Yahoo seems to have virtually no role to play. Apart from the occasional bundling deal, there is no sign the company has anything to offer — and what it does offer often seems to be a day late and more than a dollar short. Could it acquire something like Flipboard as a way of making a move in that area, the way CNN acquired Zite last year? Possibly. But then Yahoo’s history of acquiring things only to let them wither on the vine isn’t likely to fill anyone with hope.

The biggest challenge Levinsohn and Yahoo face is thinking about media in a different way, and it is the same challenge newspapers face: Just as they got used to being the main destination for people in search of content when paper was the dominant delivery system, Yahoo still seems to be stuck in a mindset that sees media as a game of scale, where the player with the most eyeballs wins. AOL has arguably been playing the same kind of game, and it hasn’t been having much more luck than Yahoo has.

If the rise of Facebook as an advertising entity has shown anything, it is that what matters now is targeting and focus — the ability to drill down into precise market segments and base decisions on actual user behavior. Just how valuable that is for Facebook and for advertisers may still be a question mark, but there is no question that advertisers want it. And Facebook is a lot better positioned to offer that than Yahoo is. If Levinsohn wants to own the future of media, he’s going to have to figure that out, and fast.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• Social media in Q1: commerce and discovery dominated
• NewNet Q1: Content Farms and Niche Networks on the Rise
• Sector RoadMap: Content personalization in 2013

Yahoo chief executive officer Scott Thompson, who has been caught in a resume gate, is leaving the company, reports AllThingsD. He is going to be replaced by Ross Levinsohn, who is currently global media head with the company, Kara Swisher adds. She also points to a settlement with activist investor Dan Loeb of ThirdPoint Capital. Thompson got into hot water after Loeb’s group reported that he didn’t really have a Computer Science engineering degree. Since then, pressure had mounted on him and the board.

Earlier this year when Thompson took over as the CEO of the company, I pointed out that all these figureheads don’t really solve the problems facing Yahoo. In my post I had pointed out:

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. The loss of web attention to other web services? A befuddling mobile strategy? Check, check! Still the same.

From that standpoint, nothing really has changed. Except for the company showing its fangs and suing Facebook for infringing on its patents. Writing at that time, I pointed out that “Yahoo is 17 years old and that is a long time in Internet years. It has missed two major shifts – social and mobile – and it doesn’t have much choice.”

That, unfortunately is Yahoo’s reality, regardless of who is in charge. I think even Loeb needs to come to terms with that – though I suspect Loeb’s understanding of technology and its cycles is as limited as my understanding of football.

However, there is one silver lining for startups in the Yahoo mess: incoming CEO, Levinsohn is an acquisition-happy kat. Levinsohn was behind some of the acquisitions made by News Corp.’s Fox Interactive division such as IGN, Photobucket and Newroo. It wouldn’t surprise me if he goes on an acquhire binge and snap up many of the startups that aren’t really gaining traction.

It would allow him to get some entrepreneurial talent and infuse some fresh thinking into the company. Will that be enough? I don’t think so, but what the hell, he should give it a shot. As first step, Levinsohn should team up with Heather Harde, who worked with him at Fox Interactive again.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• Social media in Q1: commerce and discovery dominated
• Priorities for Yahoo’s new CEO
• Social networks will displace business processes, not socialize them

Separately, the Yahoo board said it has appointed a three-person special committee to investigate its CEO’s academic credentials — you know, the kind of thing that’s supposed to happen before you appoint a CEO, not after. The committee’s mission:

To conduct a thorough review of CEO Scott Thompson’s academic credentials, as well as the facts and circumstances related to the review and disclosure of those credentials in connection with Thompson’s appointment as CEO.

All three members are independent directors new to the board: Alfred Amoroso is the chairman; John Hayes and Thomas McInerney are the other members. They’ve hired their own counsel, formal federal prosecutor Terry Bird. The timeline? The special committee and the board promise that they ”appreciate the urgency of the situation” and handle the review “in an independent, thorough and expeditious manner.” This announcement comes five days after Loeb’s revelations and the promise of an investigation. Meanwhile, it looks like Yahoo’s leaders want to try a business-as-usual approach (whatever that is) while the inquiry goes on.

The official reason for Hart’s makes sense. Why wouldn’t the board of International Game Technology would prefer its CEO’s energies go toward running that company rather than co-starring in Yahoo’s latest soap opera? But Hart’s decision carries a lot more baggage than that. When Loeb went public last week with the allegation that Thompson could not have the degree in computer science claimed on his Yahoo bio and in SEC filings, Loeb also pointed to a claim in Hart’s bio that didn’t match her actual degree. Hart claimed a bachelor’s degree in marketing and economics from Illinois State University but her actual degree was in business administration.

Loeb was responding to Yahoo’s claim during a proxy battle that it had carefully vetted all of the possible candidates for the board and had determined that only one of his four candidates qualified — and he was not one of them. When Yahoo admitted an “inadvertent error” in Thompson’s bio, Loeb demanded his firing and Hart’s resignation by noon Monday. He didn’t get either.

But now he has Hart’s resignation, whatever the reason offered. He may yet get Thompson to leave or be fired but the Yahoo board appears to be doing everything possible to avoid another change in CEOs. Thompson is at the beginning of a major reorganization and is in the process of laying off 2,000 employees.

No comment from Loeb yet on Tuesday’s actions.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• Social media in Q1: commerce and discovery dominated
• Social networks will displace business processes, not socialize them
• Sector RoadMap: Content personalization in 2013

In a staff e-mail Monday posted by AllThingsD, Thompson stressed that a board investigation is ongoing, said he was cooperating and added:

In the meantime, I want you to know how deeply I regret how this issue has affected the company and all of you. We have all been working very hard to move the company forward, and this has had the opposite effect. For that, I take full responsibility, and I want to apologize to you.

There was no explanation of how he wound up credited with a computer science degree from Stonehill College when it didn’t offer the program until after he graduated. Or why he didn’t correct an interviewer in 2009 when she mentioned the degree.

Thompson’s e-mail went out a few hours after Daniel Loeb, the head of hedge fund Third Point, issued his latest broadside: a demand for Yahoo to turn over documents related to Thompson’s hiring, the appointment of Patti Hart to the board, and the vetting of the director candidates Yahoo chose over Loeb and most of his slate. Hart was the head of the search committee; she also has been accused of misrepresenting her own undergraduate degree.

This came after the board — as expected — ignored Loeb’s Monday deadline for firing Thompson and having Hart resign. Issuing that kind of ultimatum was like double-dog-daring the board not to do anything by then. No doubt, they would prefer not to do anything that comes off as a response to a proxy battle but it’s too late for that now.

Meanwhile, the process has become the message. The longer the board takes to do or say anything concrete, the less there is to recover.

Not about the degree

Let’s get something straight. This isn’t about where Scott Thompson went to school or what degree he earned there. Those things mattered before Thompson had a track record of success and at various points they likely helped him get jobs. That isn’t what gets you a mid-career gig as CEO at a public company.

But a computer science degree provides a kind of street cred, especially when you’re dealing with engineers and developers.

When @jason asked me on his show what I knew about the new Yahoo! CEO, 1st thing I said was “he has a CS degree.” Turns out, not true! wow

— Marshall Kirkpatrick (@marshallk) May 5, 2012

And even if the kind of unearned degree being claimed doesn’t matter, claiming it and letting it stand does. The first e-mail I opened Monday was from a CEO bemused by Thompson’s failure to meet the problem head on. Demand Media CEO Richard Rosenblatt tweeted something similar over the weekend:

@sdkstl @karaswisherI agree Scott Thompson’s biggest issue is how he responded; fess up, apologize and ask for mercy

— Richard Rosenblatt (@demandrichard) May 6, 2012

then followed Monday:

@karaswisher if I was him I would grudgingly resign for the good of the thousands of yahoo employees who can’t handle any more drama

— Richard Rosenblatt (@demandrichard) May 7, 2012

When the subject came up during Warren Buffett’s three-hour stint on CNBC, the oracle of Omaha said:

“If I thought as a director, if I thought that an officer had consistently misstated some fact to me, I think I would probably do something about it. We actually had that one time. If you can’t trust the people you’re working with, you’ve got a problem.”

And that’s the real issue.

What next?

If Thompson resigns, is fired for cause or takes a suspension, Yahoo doesn’t have to reach far for interim leadership. The safest bet: CFO Tim Morse has been part of Thompson’s re-org plans and was interim CEO after Carol Bartz was fired. He could step in again. The board, which is in its own state of transition as four members leave and up to five come on, would face the same question as Jeff Bewkes following the short reign of Jack Griffin as CEO of Time Inc. — go inside or try again with an outside candidate. Ross Levinsohn’s name has been raised a few times as a possible internal successor. Rich Riley, the EMEA head who Thompson picked to head the revenue side of the Americas in the new re-org could get a look.

Doing anything permanent before the new board is fully in place would be repeating a mistake. Lucy Marcus thought it was wrong for the outgoing board to pick a CEO.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• Social media in Q1: commerce and discovery dominated
• Social networks will displace business processes, not socialize them
• Sector RoadMap: Content personalization in 2013

They probably shouldn’t use Yahoo CEO Scott Thompson as a template. Thompson could have ‘fessed up when his resume padding was revealed by Third Point CEO Daniel Loeb during a proxy battle. He could have explained why he decided to claim a phantom degree in computer science or to let it stand if it started as a mistake by someone else.

In the past, that was best accomplished by telling your story to an interviewer who would be tough but fair. Today, he easily could have gone direct via a blog post or a memo. He even could have gone Kanye by taking it to Twitter.

With the right explanation and tone, a sincere apology and possibly some kind of penalty like a cut in pay, Thompson and the Yahoo board might be able to escape major fallout from this tornado.

Instead, Thompson is channeling the Wizard of Oz, first ducking behind a company statement about an “inadvertent error” and promise of a probe, then telling fellow Yahoos in a terse e-mail posted at All Things D:

I am sure you have seen the reports of questions raised regarding my undergraduate degree. As we said yesterday, the board is reviewing the matter and, upon completion of its review, will make an appropriate disclosure to shareholders.

In the meantime, Thompson urges everyone to ignore the yipping dog, pulling the curtain back to reveal a mere mortal operating a machine rather than an all-knowing wizard. (Taking this analogy all the way, that would make Loeb Toto but not gonna go there.)

… I’m doing what I hope all of you are doing — staying focused on our customers, our shareholders, our team and moving Yahoo! forward, fast.

True, Thompson has much more to focus on: getting a vital Ali Baba stake sale done; dealing with the aftermath of laying off some 2,000 employees and executing the massive re-org that started May 1. It’s hard to believe anyone involved at the company wants to go through another CEO switch at this point. It’s even harder to believe Thompson or anyone else on the board wants to be perceived as giving into Loeb’s demands that he be fired by Monday at noon.

Kara suggests the current board will turn the whole problem over to the new one, which places any resolution weeks out and ostensibly gives Thompson time for a win with a sale of at least part of the Ali Baba stake:

What do I really think? I think this cursed board will maintain its 100 percent score of doing the wrong thing at the right time.

But from another perspective, the anemic response and lack of any admission of personal responsibility so far may force swifter action.

If Thompson ends up joining the ex-Yahoo CEO club due to this, it won’t be because of the false degree claim. It will be over the way he responded.

Update: Dan Lyons weighs in with the “so what, take”:

Here’s the thing. The people howling about Résumégate don’t really care about Thompson’s credentials. They just want the guy out, for different reasons, and they see this résumé business as a pretext to get rid of him.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• Social media in Q1: commerce and discovery dominated
• Social networks will displace business processes, not socialize them
• Sector RoadMap: Content personalization in 2013

Thursday, Loeb, the CEO of hedge fund Third Point, revealed something that should have been caught well before now: CEO Scott Thompson doesn’t have the education credentials that were listed in his bio and included in Yahoo SEC filings. Thompson did graduate from Stonehill College but his degree was in accounting — not accounting and computer science. The school didn’t have a computer science department when he was there. Yahoo’s response confirmed the inaccuracy, calling it an “inadvertent error” and promising a probe into that, as well as another Loeb assertion that director Patti Hart was claiming a degree she didn’t have.

Now Loeb is demanding that Thompson be fired for cause by Monday and that Hart resign. He also wants to be added to the board along with his full slate, which includes Jeff Zucker, Michael Wolf and Harry Wilson. Given the board’s resistance to anything like that so far, he could end up forcing the resignations and still not getting on the board.

It doesn’t help Thompson’s case that audio of an interview has surfaced where he had the chance to correct the computer science error and instead stuck to it and called himself an “engineer.”

What can Loeb do?

Holding 5.8 percent of the stock gives him a voice but he doesn’t own enough to force action. What he can do is make life more miserable for Thompson and the board while he tries to gain more voting power.

As for Thompson, he may be able to ride this out but the past history makes that more difficult.

Either way, it’s an energy drain that Yahoo doesn’t need.

Loeb’s latest broadside:

May 4, 2012
Board of Directors
Yahoo! Inc.
701 First Avenue
Sunnyvale, CA 94089

Dear Board of Directors:

Yahoo!’s initial response yesterday to Third Point’s identification of material inaccuracies in both CEO Scott Thompson’s and Director Patti Hart’s educational record was insulting to shareholders. We assume that these initial statements were attributable to Mr. Thompson and were not made with the Board’s approval. While we appreciate the Board’s statement late last night that it would conduct an investigation, unfortunately, for this Board and this Company, it is too little and months too late.

To assert that years of inaccurate SEC filings, website biographies and, most likely, D&O questionnaires and curriculum vitae (including, presumably, the CV provided to Yahoo! when Mr. Thompson reached out for the job) were “inadvertent” is, in our view, the height of arrogance. Mr. Thompson and the Board should make no mistake: this is a big deal. CEO’s have been terminated for less at other companies. The Company’s Preliminary Proxy Statement filed on April 27, 2012 (at page 22) states that the “minimum qualification for service as a director of the Company are that a nominee possess. . . an impeccable reputation of integrity and competence in his or her personal and professional activities.”

Furthermore, Yahoo!’s response “confirming” that Ms. Hart “specialized” in Marketing and Economics, rather than having earned her degree in such subjects (as Ms. Hart has asserted in filings for years) is a similar canard. A “specialty” is not a major. It is not a “minor”. We don’t know what it is, but we do know that like Mr. Thompson, Ms. Hart has been misrepresenting her actual degree to the investing public for years. Again, we hope that the Board does not accept this feeble attempt at “spin” as a justification for Ms. Hart’s misrepresentations.

Irreparable damage to Yahoo!’s culture will continue every day that the Board allows Mr. Thompson and Ms. Hart to remain at the helm of the Company after having clearly demonstrated that they lack even the “minimum qualifications for service as a director of the Company.” Mr. Thompson, in particular, cannot possibly have any credibility remaining with the all-important Yahoo! engineers, many of which earned real – not invented – degrees in computer science. Moreover, permitting Mr. Thompson and Ms. Hart to stay with the Company after apparently violating the Code of Ethics sends a message to all Yahoo! employees that a different set of rules applies at the top.

Third Point, Yahoo!’s largest outside shareholder with over $1 billion invested, called yesterday for an immediate investigation if our assertions were true. The Board appears to have acceded to this demand. Its response must be swift and decisive. In that regard, Third Point will consider it grounds for further action if the Board does not take the following steps by Noon EDT on Monday, May 7th:

1) Publicly reveal the process by which it vetted Mr. Thompson as a potential CEO candidate. This disclosure should include the release of all minutes of any meeting at which Mr. Thompson’s candidacy was discussed and any reports or other materials upon which directors relied to evaluate Mr. Thompson’s candidacy.

2) Disclose whether any Board member, including Maynard Webb, who has long-standing ties to Mr. Thompson, and Ms. Hart, who headed the Search Committee, was aware of Mr. Thompson’s deception prior to receipt of Third Point’s letter yesterday.

3) Provide shareholders with all information regarding the director nomination process, including the so-called “skills matrix” referred to in the Company’s preliminary proxy statement, which the Board purportedly used to determine the qualifications of various candidates, including Third Point’s nominees.

4) Terminate Mr. Thompson for cause immediately given his demonstrable unsuitability to remain Chief Executive Officer and a director of Yahoo! and accept the resignation of Ms. Hart for similar reasons.

Finally, we urge the Board to stop wasting valuable company resources and drop its resistance to placing the Third Point nominees on the Board. We are prepared to join immediately. Once on the Board, our first tasks will be to work with the remaining Board members to find Yahoo! a new leader with the qualifications and integrity to lead the Company and install best practices of corporate governance. The Company can ill afford to continue this misguided fight with its largest outside shareholder while it has so many other fires to put out. There has been enough damage already.

Sincerely,
Daniel S. Loeb
Chief Executive Officer
Third Point LLC

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• Social media in Q1: commerce and discovery dominated
• Connected world: the consumer technology revolution
• Social networks will displace business processes, not socialize them

The head of hedge fund Third Point, which is the largest institutional investor in the Sunnyvale company, is waging a proxy battle with Thompson and Yahoo directors over seats on the board. On Wednesday, Thompson stressed a lack of qualifications for Loeb and some of his candidates to be on the Yahoo board — so Loeb went public Thursday afternoon with the allegation that Thompson couldn’t have a computer science degree since it wasn’t offered when he went to Stonehill. Yahoo admitted to an “inadvertent” error and removed the offending line from Thompson’s online bio and promised a probe.

It’s going to be a lot harder to make the problem disappear.

[<a href="http://storify.com/sdkstl/yahoo-s-ceo-takes-a-credibility-hit" target="_blank">View the story "Yahoo's CEO Takes A Credibility Hit" on Storify</a>]</p> <h1>Yahoo’s CEO Takes A Credibility Hit</h1> <h2>Yahoo CEO Scott Thompson has been using a resume with a false claim for more than a decade. Activist shareholder Daniel Loeb unveiled Thompson’s lack of a computer science degree during a proxy fight, saying it raises issues about his credibility and the board members who hired him.</h2> <p>Storified by Staci D Kramer · Fri, May 04 2012 09:45:20</p> <div>However it happened, Scott Thompson made it through multiple high-level jobs without a challenge to his claim of a bachelor’s degree in accounting and computer science from Stonehill College. Then he ran into shareholder Daniel Loeb, who is waging an open war with Thompson and Yahoo directors over seats on the board, and went public Thursday with the allegation that Thompson couldn’t have a computer science degree since it wasn’t offered when he was at school. Yahoo admitted to an “inadvertent” error and removed the offending line from Thompson’s online bio. It’s going to be a lot harder to make the problem disappear. </div> <div>Loeb sent a letter to Yahoo, filed it with the SEC and posted it on a site set up to tell Third Point’s side during the proxy fight:</div> <div>Upon recognizing this discrepancy, Third Point initially assumed that the documents we had reviewed were incorrect and the representations in Yahoo!’s public filings were accurate. However, we were then informed by Stonehill College that Mr. Thompson did indeed graduate with a degree in accounting only. Furthermore, Stonehill College informed us that it did not begin awarding computer science degrees until 1983 — four years after Mr. Thompson graduated. We inquired whether Mr. Thompson had taken a large number of computer science courses, perhaps allowing him to justify to himself that he had “earned” such a degree. Instead, we learned that during Mr. Thompson’s tenure at Stonehill only one such course was even offered – Intro to Computer Science. Presumably, Mr. Thompson took that course.</div> <div>(A small piece of advice for Loeb: as a favorite editor of mine says, “Assume nothing, presume nothing.”) </div> <div> <h2>Wait, there’s more</h2> </div> <div><p>Loeb also made a revelation about Patti Hart, the board member who headed the search committee that recommended Thompson. Turns out she had claimed a  “Bachelor’s degree in marketing and economics” from Illinois State University; her actual degree was in business administration. </p> <div></div> <div>When he was at eBay, filings with the SEC described Thompson’s credentials accurately, even while his company bio included he computer science degree. At Yahoo, it was included in the <a target=”_blank” href=”http://yhoo.client.shareholder.com/secfiling.cfm?filingID=1193125-12-191515&CIK=1011006″>bio filed</a> as part of the proxy statement – as was Hart’s. That elevates the potential problem to one of filing misinformation with the SEC. Either way, it appears to to be a clear violation of Yahoo’s code of ethics:</div> </div> <div>Disclosure in reports and documents filed with or submitted to the U.S. Securities and Exchange Commission and in other public communications made by Yahoo! must be full, fair, accurate, timely and understandable</div> <div>undefinedRackcdn</div> <div>Loeb demanded an investigation, suggested that Thompson and Hart both be removed if there aren’t good explanations, and pushed again for a change to the board before the yet-to-be-scheduled annual meeting. Loeb is demanding four seats on the board, including one for himself. The other candidates proposed by Third Point are former NBCU CEO Jeff Zucker,  McKinsey/Viacom alum Michael Wolf and corporate turnaround expert Harry J. Wilson. Yahoo agreed to seats for Wilson and a second mutually agreed-on candidate but rejected Loeb. In a letter to shareholders filed Wednesday, Yahoo said:</div> <div>The board continues to believe that Mr. Loeb himself does not bring the relevant skill set and experience to the board, particularly in comparison to the candidates selected by the board. In addition, we believe that, based on the specific qualifications of Third Point’s nominees relative to Yahoo!’s business and opportunities, the candidates nominated by the board’s Nominating and Governance Committee are significantly superior to those proposed by Third Point.</div> <div> <h2>No one at Yahoo needs another distraction</h2> </div> <div> <div>This wave of allegations and revelations comes as Thompson’s reorganization kicks in. Last month, he <a target=”_blank” href=”http://paidcontent.org/2012/04/04/yet-another-yahoo-ceo-tries-to-cut-to-glory/”>sliced 2,000 jobs</a> from the payroll and <a target=”_blank” href=”http://paidcontent.org/2012/04/10/yahoo-ceo-follows-sharp-cuts-with-blurry-re-org/”>announced a new setup</a> that took effect May 1. Despite Loeb’s complaints, it appeared as though Thompson was on track to follow through. </div> <div></div> <div> <div>Whatever comes next, Thompson’s tenure has a tarnish on it now.  That’s led to instant speculation …</div> </div> </div> <div>Isn’t it inevitable that Yahoo’s Scott Thompson will be Apothekered within the next few days?Harry McCracken</div> <div>How Did Yahoo CEO Go a Decade With "Inadvertent Error" on His Resume?The gut instinct for many people looking at news that Yahoo CEO Scott Thompson listed a degree he does not hold on his resume is that it’…</div> <div>If Scott Thompson claims someone at eBay padded his resume 6 yrs ago & he was careless in not noticing, I will scream bloody murder $YHOOEric Jackson</div> <div>and outright calls for his departure.</div> <div>Cooking The Books: Yahoo CEO Scott Thompson’s CS Degree “Error” Should Cost Him The Job"You guys might want to cover this before he resigns tomorrow," one hardcore reader emailed in this evening. And yes indeed, newish Yahoo…</div> <div>The Disgrace Of Yahoo"The visionary lies to himself, the liar only to others." – Friedrich Nietzsche Yahoo CEO Scott Thompson has lied about receiving a compu…</div> <div> <h2>Nothing inadvertent about this</h2> </div> <div>In 2009 Interview, Yahoo CEO Does Not Deny He Has a CS Degree and Calls Himself an "Engineer"On March 25, 2009, Yahoo CEO Scott Thompson – when he was then president of PayPal – appeared on the TechNation radio show to talk about …</div> <div>An extra line in a bio may be possible to explain away. Calling yourself an engineer during an interview, not so much.</div>

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• Social media in Q1: commerce and discovery dominated
• Social networks will displace business processes, not socialize them
• Sector RoadMap: Content personalization in 2013

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• NewNet Q4: Platform mania and social commerce shakeout
• Connected world: the consumer technology revolution
• NewNet Q3: Facebook remakes headlines in social media

On the macro level, just about everything new Yahoo CEO Scott Thompson told analysts and investors Tuesday could apply to any big company: focus on core businesses; put customers first; don’t buy things that aren’t absolutely necessary; put your best people in the right places; need to be nimble; think like a growth company.

But Thompson did get a tad micro in an almost-SNL-worthy Boston accent that came in most handy when he was chiding Microsoft for failure to deliver on search, when he was talking up the need for Q1′s decent results to be better — and when he described true personalization as knowing he only wants to hear about the Bruins, the Celtics and the Red Sox.

For the blow-by-blow, or most of it anyway, check Kara’s giddy live blog or Rob Hof’s version. Here’s what stood out to me:

Earnings: Yahoo produced some positive results in Q1, pushing its share price and expectations up. Profits rose by 28 percent to $256 million on $1.07 billion in revenue, a 1 percent increase over the same quarter last year. This gave Thompson a shinier surface to stand on when declaring that Yahoo would do better on his watch: “I’m not satisfied with the pace of topline growth and won’t be until we’re on pace with market growth.”

Stripping down: We’ve heard it before, heck, we’ve said it before. Yahoo has been weighed down for years by way too much product. Thompson’s light-bulb moment came after discussions about what it would take to change Yahoo: “Yahoo has been doing too much for too long … We need to be clearer going forward about what we won’t do.” How is he going to fix this? Fifty properties that “don’t contribute meaningfully” are being shut down. I’ve been told most of them are outside the U.S. but Yahoo won’t confirm that or provide details. Hard to imagine that 50 will be enough but Carol Bartz did give him a head start.

Instead Yahoo will focus on the properties that contribute the most engagement and revenue — news, finance, sports, entertainment and mail. R&D and resources will go to owned-and-operated sites, halting third-party efforts.

YHOO data by YCharts

Execution: Chief Product Officer Blake Irving is among those who won’t be around for the Thompson era. Thompson didn’t namecheck him that I heard but he did rip the product process and promised to reduce frustration by dismantling it. Of course, his predecessor Carol Bartz set up this system to accomplish the very goals Thompson says he is after. Yahoo’s process is “way too complex,” he said on the call, and has “stifled innovation” frustrating Yahoos who really want to produce. Instead, as he mentioned in last week’s re-org memo, he’ll put engineers back with the product groups to encourage innovation and shorten the process.

Microsoft and search: If you can throw a company that’s much bigger than you under the bus, Thompson did it. “The search alliance is not yet delivering what we expected,” he said, adding that he “personally” working with Microsoft to fix it. Search revenue was up 8 percent because of tweaks Yahoo made to improve the search experience, Thompson and CFO Tim Morse said, not because of Microsoft. The search alliance has had a slow path; the transition is only now wrapping up in the UK, Ireland and France. Morse was a tad more good cop: “We’re covered for another year of the guarantee. I still belive we’ll get there.” Later Thompson said Yahoo and Microsoft are in “early days of revisiting the relationship .. it’s something we have to get right because it’s obviously important to us.”

Display advertising: Display advertising, where Yahoo should shine, is still a problem child, down 5 percent in the Americas unit for Q1, down in Europe and up single digits in AIPAC. (Yahoo currently is divided by regions; when Thompson’s recently announced re-org kicks in May 1, the regions will handle sales while responsibility for products moves to new units.) Morse: “We do see display revenue regaining growth YoY in the second quarter so feel good about that.”

M&A: Also from the CEO handbook, Thompson promises to be very thrifty and to back up any acquisitions, not that he’s shopping, and “will know what the outcome of any M&A will be before” we spend. Where might Yahoo spend? Asked whether Yahoo can improve its ability to analyze data strictly through existing internal resources, Thompson replied, “Everything we’re doing with data right now is inside the business … That said, if there is a company or group of people that have unique ways, unique science, unique technology to really help us leverage up inside (we’d look). We don’t have anything to announce today.”

On the flip side, despite wide belief that the business is already for sale, Thompson insists he hasn’t decided whether to sell Yahoo’s ad tech business, including Right Media. “We’ve made good progress but haven’t come to a conclusion. It would be premature to imagine we could give that answer today.” He promised: “We will be able to articulate our entire strategy on the ad stack.” No timeline though.

Suing Facebook: The backlash to Yahoo’s suing Facebook over 10 patents doesn’t appear to have had any effect. The lawsuit was included in the Q1 earnings report as a business highlight and by Thompson as one of the steps he took in his first three months, explaining,

“Other companies license our IP. Facebook must do the same or change the way they do business.”

Mobile and devices: Yahoo execs promise mobile superiority the way Lucy holds a football for Charlie Brown. Thompson’s version: “We need to get real good real fast in mobile … on devices overall — and we’re not there today. We won’t stop until we have a #1 position on every device.”

E-commerce: This is a trick item, sort of like when we would put a blank space in the school paper and claim it was supposed to be about apathy. Nothing apathetic about Thompson’s approach to e-commerce, which is supposed to power some of that promised growth, but not much new either. I expected a little more than the CEO equivalent of “watch this space” given the drumbeat that’s been getting louder and yesterday’s announcement that his fellow PayPal import Sam Shrauger and Yahoo vet Mollie Spilman will head the new e-commerce unit. Thompson did walk back a bit on calling the unit “new” as it is based on existing properties being rolled up.

What next? It’s hard to be nimble while playing musical chairs so the transition needs to be quick. That’s not going to be easy given the 2,000 layoffs, the product shutdowns and the changing lines of command.

Thompson insists he doesn’t have to reinvent Yahoo — but “we absolutely do have to reinvent the experiences our users have with the marquee properties that bring them here every day.” The longer it takes to do that, the more ground Yahoo loses.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• Social media in Q1: commerce and discovery dominated
• Content monetization: News licensing and syndication still need marketplaces and infrastructure
• NewNet Q4: Platform mania and social commerce shakeout