After just five months, Yahoo has replaced CEO Scott Thompson, who was forced to step down under intense pressure from investors. At issue: a computer science degree listed in his resume and in official filings that didn’t seem to exist anywhere else. Reports of Thompson’s diagnosis with thyroid cancer surfaced alongside the news of his resignation.
Following so closely on the heels of a restructuring under Thompson and the eighth monthly search engine market share decline, what does this mean for Yahoo search? If interim CEO Ross Levinsohn has his way, it could mean the revitalization of the struggling company’s revenue through their online advertising business.
AllThingsD has covered pretty much every inch of the highly politicized situation as it began to unravel, including the official announcement of CEO changes and the proxy settlement, details on the $7 million “Make-Whole” cash bonus Thompson walks away with, and even a leaked email from interim CEO Ross Levinsohn on his plans for the ailing former giant.
Yahoo’s Recent Restructuring Under Thompson – Search Almost Chopped
In April, when Yahoo announced thousands of layoffs amidst a massive restructuring, there was much speculation they planned to end the Microsoft-Yahoo search deal and look to Google, instead.
As the dust settled, however, Thompson’s vision became clear and still included their search business. It now falls under the “Connections” department, led by senior VP Shashi Seth.
Yahoo’s Ongoing CEO Struggles
Remember when Microsoft wanted to buy Yahoo for $31 a share back in 2008? By last year, they were offering up only half that.
Carol Bartz had failed to turn the company around by the time she was fired over the phone and famously referred to the Yahoo board as “doofuses” who had “f***ed her over.” Since then, the door to the CEO’s office has been a revolving one.
Tim Morse took over for Bartz in the interim, Thompson was hired to fill the position, and now Levinsohn will almost certainly vie for the permanent position. In fact, he’s the fifth to hold the company’s top spot in as many years.
Bartz was still steering the ship when Yahoo entered into an agreement with Microsoft and AOL to band together to sell off Class 2 display ad inventory. Google had overtaken Yahoo as the display ad leader in Q1 2011. The deal had yet to come to fruition with Thompson calling the shots; neither Bartz nor Levinsohn were known for their prowess in advertising, online or off.
Interim CEO a “Veteran of the Ad World”
Levinsohn, however, was leading U.S. operations when that deal was made. He controlled operations when, shortly after, Yahoo cut out retargeters in an effort to increase Yahoo’s yield on second-tier ads. He was at the helm in the U.S. when Yahoo insiders were rumored to have pressured Bartz to scoop up premium video service Hulu.
The WSJ describes Levinsohn as “a veteran of the ad world, having forged strong alliances with executives at Madison Avenue agencies that represent the biggest ad spenders.”
Yahoo released a statement from Fred Amoroso, chairman of Yahoo’s board of directors, Monday naming Levinsohn interim CEO and explaining the agreement with Third Point. It read, in part:
“The Board is pleased to announce these changes and the settlement with Third Point, and is confident that they will serve the best interests of our shareholders and further accelerate the substantial advances the Company has made operationally and organizationally since last August. The Board believes in the strength of the Company’s business and assets, and in the opportunities before us, and I am honored to work closely with my fellow directors and Ross [Levinsohn] to continue to drive Yahoo forward.”
Yahoo’s stock got a bump in the wake of the news of Thompson’s departure, rising 3.1 percent in Monday trading. The deal under which he left gives Yahoo’s largest investor, Third Point, three additional seats on the board. One of the seats goes to Daniel Loeb, who led the outcry over Thompson’s dubious degree on his resume and hand-picked the other two board members from his organization.