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Thompson may be out, but Yahoo still a mess

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Yahoo (s YHOO) 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.

13 Responses to “Thompson may be out, but Yahoo still a mess”

  1. Steve K

    Some Wall Street finagler buys up 5% of a company using other people’s money and then makes enough public noise to get control of 25% of the board? And wants the CFO to run the company? Yeah, everyone else that is trying to make something happen is gonna get fleeced by a short term Wall Street rapist.

  2. If Y! needs entrepreneurial drive – if it wants innovation and fresh thinking – it should do so at the grass roots and Director level within the company – not at the “C” level and also not via acquisition of ring-fenced start-up guys who will not thrive in the 12,000-employee behemoth that is now Y! It’s not sexy and it’s not flashy but Y! needs to refocus and then rebuild and replenish at the Director level – they’re actually running the company after all…

  3. AlanLindsay

    I know at least two highly talented people that any online media company would be ecstatic to have on board who were by Yahoo hired POST layoffs. So no – not all a one way street.

    Plus – over a billion in revenue per quarter but still apparently doing badly.

    This isn’t like you Om – normally you don’t just follow the Valley herd mentality and look a bit further. The only sense in which Yahoo is dead is that it isn’t ‘hot’ in the Valley. Outside the tech-obsessed, nobody even knew there was anything going on until today – if even then.

    YHOOs income is about five times greater than facebook’s. Last quarter Yahoo’s income increased (very slightly) and Facebook’s fell – apparently the seasonal online ad market was poor – or was it just poor for facebook?

    Bottom line – this isn’t about reality – it is about the same stupid ‘in’ and ‘out’ crap that adults are supposed to have left behind in high school. 95% of the people commenting on Yahoo – both in the media and just randomly spouting off – don’t have an understanding of any of the underlying business reality. Sure it isn’t all gravy – but Yahoo isn’t in trouble either. Frankly people are more upset about the stock price then Yahoo’s fundamental soundness as a business – but the stock price – like lots of older companies isn’t really tracking to business success – it is tracking to the stupid fads in the internet and software worlds.

    As for Scott Thompson – of course he had to go. Not so sure about previous CEOs

  4. Barry Root

    Kind of sad to compare a few smart guys with great ideas, as Yahoo! once was, to a boardroom full of executives “trying to turn a great ship around.”

  5. What yahoo needs to do is make arrangements with hollywood to stream movies for free ….that would kick them from #4 in Alexa to #2. The rest will be history…either it will be bankrupt or it will survive.Need another dose of fresh californication baby …

  6. I wish Levinshon luck. He faces a tough job. It’s far from easy to manage a company in such apparently inevitable decline.

    So I agree with you, That said, companies like Yahoo and say, RIM and maybe Nokia are easy targets because we can say they shouldn’t be doing x or they must change y. It’s probably the case that there are smart people at these companies that know what they need to do too. But they have huge a institution to turn around, company politics and younger, leaner competitors still on the rise.

    I know it’s been done, in my view through a combination of luck, skill and the cult of personality (Apple, GE), but I’m sure it’s really hard to save a huge company.

  7. ronald

    Most acquhire are like an obese person digesting another big mac. They don’t make you more nimble if the problems is your management structure, they just add body fat. But some people feel better that way.