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Report: Scott Thompson To Step Down As Yahoo CEO, Ross Levinsohn To Step In

Greg Sterling — Sun, 13 May 2012 16:37:27 +0000

Kara Swisher at AllThingsD is reporting that embattled Yahoo CEO Scott Thompson is going to step down for “personal reasons.” Swisher has one or more “moles” inside the company and consistently gets inside information — which generally turns out to be correct.

Thompson’s “personal reasons,” as we all know, are: misrepresenting that he had a computer science degree. Yahoo EVP Ross Levinsohn is reportedly set to become interim CEO, with the apparent hope that he could take the helm permanently.

Swisher adds that the situation is still in flux and could change. The board is apparently meeting this morning.

Shareholder and hedge fund manager Daniel Loeb aggressively pushed for Thompson’s ouster and kept pressure on the board. It’s seems relatively clear that the ethics issue was an opportunity for Loeb to push his agenda.

He stoked a public-relations crisis at Yahoo that gave him more leverage in asserting demands and extracting concessions from the board. Indeed, as part of a Yahoo “settlement” with Loeb, he is “set to get three board seats from a slate proposed by him as part of a proxy fight aimed at Yahoo,” according to AllThingsD.

When the news first broke that Thompson didn’t have the computer science degree he claimed I didn’t believe it would result in his ultimate resignation. After all, he had many years of experience as a successful tech executive in Silicon Valley. In other words, he had the desired experience; the paper was a technicality of sorts — not to minimize the ethics issue.

Yet the scandal refused to go away and had become a major PR headache for Yahoo and a distraction for employees. Yahoo announced Thompson’s appointment as CEO in early January of this year. The Yahoo director who was instrumental in Thompson’s hiring, Patti Hart, resigned last week. But that didn’t put the matter to rest or satisfy Loeb.

Yahoo has endured a remarkably tumultuous period over the past three or so years. It has seen multiple CEOs, the disruption of the Microsoft search deal, waves of layoffs and executive departures as well as multiple reorganizations and strategy shifts. What an amazing and sad spectacle.

Thompson had begun to execute on a new turnaround plan, including reducing headcount at Yahoo by 2,000 employees. Levinsohn came in under previous CEO Carol Bartz and is well regarded inside the company and in the industry. His background is very different from Thompson’s. It’s not clear whether he’ll now want to put his own stamp on the company or will proceed with Thompson’s plan.

Before coming to Yahoo, Levinsohn was president of Fox Interactive Media.

Out earlier today came the Yahoo release announcing Levinsohn’s appointment and that of Fred Amoroso as the new Chairman of the Yahoo Board.

Postscript, 11:15 pm PT by Matt McGee: The Wall Street Journal is reporting that Thompson told Yahoo’s board of directors that he’s been diagnosed with thyroid cancer, and that his decision to leave the Yahoo CEO post was influenced “in part” by the diagnosis.

Photo credit: Wikipedia Wikimedia Commons

Yahoo In A Fight For Its Life

Greg Sterling — Fri, 06 Apr 2012 14:17:50 +0000

According to Reuters on Tuesday next week the already embattled new Yahoo CEO Scott Thompson will lay out his vision for the company. The pressure will be on to deliver a coherent and convincing plan — emphasis on convincing.

Following the announcement of 2,000 layoffs earlier this week Thompson sought to reassure Yahoo employees in a company memo. A streamlined organizational structure will better enable Yahoo to compete in the future, he reportedly said.

That new structure will apparently not include Yahoo Chief Product Officer Blake Irving, who has resigned. His organization took a disproportionate hit in the layoffs and is being “blown up” according to AllThingsD.

Reuters reports that Thompson’s plan will focus on three areas: “core media and communications,” “platforms” and “data.” We’ll see how that impacts what remains of Yahoo search and other products. Notwithstanding the search outsourcing deal with Microsoft, apparently there are still a remarkable “1,800 staffers for search,” according to an anonymous Yahoo executive quoted in the article:

The fate of several Yahoo businesses remains uncertain, particularly the search business, according to the source, who wished to remain anonymous because the comments involved company matters. While Yahoo struck a deal with Microsoft Corp in 2009 to outsource much of its search operations, Yahoo still employs roughly 1,800 staffers for search, the executive said.

My view has been that Yahoo made a strategic mistake in doing the search deal with Microsoft and has “paid” for it ever since it in lost talent and revenue.

Earlier this year the company shuttered a bunch of mobile apps that were underperforming. The Next Web said that Yahoo’s Asian Foursquare lookalike service Koprol is one that may also be in jeopardy. Undoubtedly there will be other Yahoo products that suffer or are entirely shuttered in the forthcoming reorg.

Whatever Thompson says next Tuesday it will be met with skepticism by the tech community, unless or until the attempted turnaround demonstrates real results. There have been too many Yahoo CEOs announcing too many comeback strategies over the past several years.

While Yahoo still has three of the top 10 US websites according to Hitwise, it has entered a kind of negative spiral that it may not be able to escape. Its value as a company and a brand has steadily eroded.

The recent layoff notices have no doubt created a kind of numbness internally among the employees that remain. They’ll be working under conditions of stress and uncertainty — not the kind of upbeat atmosphere that fosters creativity and innovation.

Stock image from Shutterstock, used under license.

Yahoo Confirms 2,000 Employees Getting the Axe

Greg Sterling — Wed, 04 Apr 2012 14:01:27 +0000

After several days of rumors, first reported by AllThingsD, Yahoo confirmed this morning that it’s restructuring and laying off 2,000 employees:

Today, the company will begin the process of informing employees about these changes. As part of that effort, approximately 2,000 people will be notified of job elimination or phased transition.

Yahoo! expects to realize approximately $375 million of annualized savings upon completion of all employee transitions. The company currently expects to recognize the majority of an estimated $125 to $145 million pretax cash charge relating to employee severance in its second quarter financial results. The company may incur additional charges in connection with this action . . .

Yahoo currently has about 14,000 employees. The company hasn’t indicated where the axe will fall. However AllThingsD’s Kara Swisher (based on her inside informants) speculates that layoffs will be across the board but hit several areas in particular:

The layoffs, which will touch all units of the company, are expected to hit hardest in the product division, which is headed by Blake Irving . . .

But the fate of two key parts of the soon-to-be-blown-apart unit — Yahoo’s advertising technology businesses, Right Media and APT, and its search business — is still being contemplated . . . Also set to be hard hit are Yahoo’s local businesses, as well as its marketing and research divisions . . .

Swisher further speculates that current Yahoo search chief Shashi Seth “is likely to run consumer products,” which will house whatever remains of Yahoo’s search business. It’s pretty clear, however, that whatever efforts Yahoo had been making around search innovation will be greatly diminished now if not entirely eliminated.

We’ll have to wait to see what remains of Yahoo after the dust settles — but it’s looking like not much. Oh the humanity.

Public domain image via US government archives.

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Yahoo’s Co-founder Jerry Yang Resigns

Barry Schwartz — Tue, 17 Jan 2012 22:17:51 +0000

Yahoo announced its co-founder Jerry Yang has formally resigned after 17 years on the job.

Yang co-founded the company in March 1995, and has been on the Board of Directors since. 17 years later, he has officially stepped down from its Board of Directors and all other positions with the company. And he has done so effective immediately. In addition, he stepped down from the Boards of Yahoo Japan Corporation and Alibaba Group Holding Limited.

This news comes only a couple weeks after Yahoo announced their new CEO Scott Thompson.

“I am grateful for the warm welcome and support Jerry provided me during my early days here,” said Scott Thompson, Yahoo!’s Chief Executive Officer. “Jerry leaves behind a legacy of innovation and customer focus for this iconic brand, having shaped our culture by fostering a spirit of innovation that began 17 years ago and continues to grow even stronger today. Jerry has great confidence in the future of Yahoo!, and I share his confidence in the enormous potential of Yahoo! in the days ahead.”

As for why Yang is leaving? He told the Yahoo board:

My time at Yahoo!, from its founding to the present, has encompassed some of the most exciting and rewarding experiences of my life. However, the time has come for me to pursue other interests outside of Yahoo! As I leave the company I co-founded nearly 17 years ago, I am enthusiastic about the appointment of Scott Thompson as Chief Executive Officer and his ability, along with the entire Yahoo! leadership team, to guide Yahoo! into an exciting and successful future.

Yang replaced Terry Semel as CEO back in 2007. Then a year later, in 2008, Yang stepped down as CEO, leading to Carol Bartz becoming the new CEO in 2009. Now, in 2011, Bartz was ousted and eventually replaced with Scott Thompson a couple weeks ago. Now we learn that Yang resigned completely from Yahoo.

To read the full release, see Yahoo’s investor site. Also see a special recollection of Yang’s early days helping marketers, in this story on our sister-site Marketing Land: As Jerry Yang Steps Down, Remembering The Yahoo Priority Queue.

It’s Official: PayPal President Scott Thompson The New Yahoo CEO

Greg Sterling — Wed, 04 Jan 2012 13:43:29 +0000

AllThingsD reported late yesterday that PayPal president Scott Thompson would likely be named CEO of Yahoo. It’s now official; Yahoo just put out its formal press release announcing Thompson’s appointment.

In appointing Thompson, Yahoo is choosing a leader with a deeper technology and product background than prior CEO Carol Bartz who was abruptly terminated last September. In the interim Yahoo CFO Tim Morse has been serving as CEO.

Not going to sell itself now

There had been an expectation that Yahoo was going to sell itself or a significant minority stake to a private equity buyer or another company (perhaps even Microsoft). However the appointment of Thompson would seem to contradict that scenario. (Update: Yahoo Chairman Roy Bostock said in the Thompson press release that the company was still considering a sale of assets.)

Thompson was PayPal’s CTO prior to being named president. Before that he worked for a technology subsidiary of Visa. And before Visa he was CIO of Barclays Global Investors. The Yahoo board undoubtedly likes Thompson’s resume, which offers a diverse mix of skills and capabilities.

PayPal has been eBay’s most successful business unit of late, outshining its parent. Thompson’s departure from PayPal will be something of a blow but probably only a temporary one to the payments platform, which is seeking to establish a leadership position in mobile.

The larger and more important question is whether Thompson has the capacity to bring new vigor and focus to Yahoo, the company and the brand — both of which badly need innovation and energy. Another question is whether he’ll seek to bring in his own team or do any sort of reorganization. Numerous personnel changes and reorgs over the past few years have been damaging to Yahoo morale and momentum.

Confronting a range of challenges

Thompson and a renewed focus on product could help stabilize Yahoo. But what we might call “structural” changes in the online ad market (including the rise of Facebook and Google in display) have perhaps irrevocably eroded Yahoo’s once dominant leadership in its bread and butter segment: display advertising. Thompson is also going to be inheriting a search deal that has underperformed and failed to live up to revenue expectations for Yahoo.

What Thompson is not is an advertising or media executive. However current Yahoo EVPs Blake Irving and Ross Levinsohn can more than compensate in those areas, provided that they’re retained or stay, as the case may be.

Mobile is another area that Yahoo badly needs to focus on. While it had an early leadership position in mobile product development and advertising that has been entirely erased by Google in the past two years. Thompson’s knowledge of and experience with the mobile market may also be extremely helpful to Yahoo.

Does he have the right mix of skills?

I had earlier written that Yahoo needed to find its own version of Steve Jobs. That may be too much too ask. But perhaps in Thompson Yahoo will get a fresh start with a new CEO who has the right mix of knowledge, skills and temperament to pull the company out of its protracted slide.

Below is a video from the 2009 Web 2.0 conference in San Francisco at which Thompson spoke about PayPal and mobile payments.

Postscript: Yahoo has officially confirmed Thompson’s appointment as CEO. Yahoo Board Chairman Roy Bostock also indicated in the press release that the company is still considering a sale of some of its assets:

“Scott’s primary focus will be on the core business, and as CEO and director, he will work closely with the Board as we continue the strategic review process to identify the best approaches for the Company and its shareholders. As part of this process, Yahoo! is considering a wide range of opportunities for the Company’s business, as well as specific investments or dispositions of assets,” added Bostock.

Postscript II: Now a couple of reactions from financial analysts who cover Yahoo. They’re consistent, seeing Thompson as a positive hire but expressing some concern about his lack of experience with digital advertising.

Mark Mahaney, Citi:

We Are Marginally Positive On YHOO’s CEO Hire – Mr. Thompson was with PayPal for the past five years – he has been CEO of PayPal since 2008 and before that he was SVP and CTO of PayPal . . . We believe Mr. Thompson has strong technical and organizational skills (like Carol Bartz) and should bring that rigor to Yahoo!. His track record at PayPal was excellent. However, we are somewhat concerned that he does not have strong media/advertising experience, which we believe Yahoo! needs, given the structural issues surrounding the company’s Search and Display initiatives. And by selecting Mr. Thompson, Yahoo! is explicitly pursuing a Growth strategy, whereas we believe a Value strategy might be more appropriate.

Ben Schachter, Macquarie Capital (USA):

We’ve always been impressed with how Scott Thompson led PayPal, and believe that his experience and track record of execution rank him amongst the Internet sector’s more capable executives. YHOO should benefit from Thomspon’s leadership, but we must admit that we find the appointment somewhat surprising given Thompson’s background as a specialist in the online payments/technology space. YHOO has been in the midst of an identity crisis, unsure of its place on the Internet. We look forward to seeing how Scott defines Yahoo, but at this very early stage that vision remains unclear. All else equal, we would have preferred to see the Board hire a candidate with deeper experience in the online advertising/media space, but Thompson could surprise by defining and executing YHOO’s vision in an unexpected way.

Yahoo Rolls Out New SERP, Will People Notice?

Greg Sterling — Fri, 16 Sep 2011 12:29:30 +0000

In the wake of the firing of Yahoo CEO Carol Bartz and amid the growing speculation surrounding a possible sale of the company, work continues for the Yahoo rank and file. (The employees must have a kind of PTSD.) But in the spirit of “life goes on,” Yahoo search engineers announced that the company is introducing improved SERPs.

The offer a somewhat cleaner design, with tabs showing related content and navigational filters that allow sorting by date and related searches.

All the changes discussed in the Yahoo Blog post aren’t live for me but they appear to be generally incremental or modest improvements. Most of the changes appear designed to provide suggestions for related searches and generate additional search volume accordingly.

Last month comScore reported that Yahoo’s US market share had grown by 0.2 percent. It’s basically “stable” or “stuck,” depending on your preference.

Bartz’s legacy is cost containment; and her chief “accomplishment” is the Microsoft search deal, which Wall Street wanted but which sent lots of engineering talent out the door. While the search alliance has generally been good for Microsoft it has not yielded the anticipated dividends (literally and figuratively) for Yahoo.

With Carol Bartz Out As CEO, Yahoo Needs To Find Its Own “Steve Jobs”

Greg Sterling — Wed, 07 Sep 2011 14:15:17 +0000

The not-so-shocking news came yesterday afternoon that embattled Yahoo CEO Carol Bartz was fired. When Bartz came to power in January 2009 I compared her to then newly elected Barak Obama. Both confronted crises and high expectations. Both have seen goodwill erode and give way to disappointment.

Low Employee Approval

The task of both chief executives was to turn around a their respective enterprises. Obama has not been able to do it and may face an electoral ouster next year. And after a number of flat or down quarters Bartz was removed over the phone yesterday. That followed several months of rumors that she would be fired.

Bartz’s employee approval rating had sunk to 33 percent, according to Glassdoor, Obama’s numbers are in the low 40s. Among the Yahoo-employee comments on Glassdoor,”execution” failures were cited as a major reason for disapproval of Bartz.

Bartz confirmed the termination herself (from her iPad) before Yahoo itself did in a press release. People are now reading between the lines of that press release for signals as to what Yahoo may do next. The particular line drawing scrutiny is Yahoo’s Chairman Roy Bostock’s statement, “We are committed to exploring and evaluating possibilities and opportunities that will put Yahoo! on a trajectory for growth and innovation and deliver value to shareholders.”

Carve It Up, or Sell the Whole Hog?

That statement, together with the fact that CFO Tim Morse is now the acting CEO, is being seen as a suggestion of a sale of some or all of the company. However a carving up of the company’s assets seems less likely than a sale of the entire company. But that in turn seems less likely than an attempt to find a new CEO and try again. A merger of AOL and Yahoo would probably be a disaster.

Bartz’s ouster has prompted many to say again that Yahoo made its first mistake by not selling whole hog to Microsoft for $45 billon several years ago. Many people also believe that selling search to Microsoft was a mistake. I agree, but Bartz followed a certain kind of cost-cutting logic in doing that deal as well as other “outsourcing” deals at Yahoo.

Others are speculating about who the next CEO might be or should be. GigaOM’s Om Malik likes Jason Killar (of Hulu) as a strong, product-oriented CEO. Yahoo is bidding for Hulu. Mike Shields in Digiday lists numerous current and former interactive and media company CEOs as possibilites (including Michael Eisner), arguing that Yahoo’s next CEO should be from New York and fully position Yahoo as a “media company” rather than a Silicon Valley based tech company.

Yahoo Needs to Find Its Steve Jobs

Yahoo needs a master marketer and visionary to help focus and market the company to employees, investors and consumers. Effectively it needs its own version of Steve Jobs.

Yahoo has already given co-founder Jerry Yang a try, without success. And finding a person with the leadership skills, charisma, vision and overall capabilities of a Steve Jobs is impossible. But if it is going to regain momentum the company still needs someone almost as inspired to help lead the company out of the wilderness.

Yahoo is still a powerful brand with considerable traffic and assets. The company has not fallen as far for “regular people” as it has for technology journalists and insiders. If it is going to avoid being carved up and “sold for parts,” the company will need to find the right CEO who can reinvigorate the company, create a product vision and restore growth. Yahoo isn’t going to get more than about one more chance to “get it right.”

Postscript: Kara Swisher at AllThingsD has compiled a list of potential CEOs for Yahoo, including names such as Facebook’s Sheryl Sandberg, News Corp’s Jon Miller and Microsoft’s Yusuf Mehdi. Most of the candidates, however, are unlikely for one reason or another.

Postscript II: From the WSJ: “One of these people said Yahoo is open to selling itself to the right bidder.”

Confirmed: Bartz Out As Yahoo CEO

Matt McGee — Tue, 06 Sep 2011 23:21:15 +0000

Details are very sparse, but All Things Digital is reporting that Carol Bartz’s rocky tenure as Yahoo CEO has ended.

All Things Digital reports that current CFO Tim Morse will take over the CEO spot on an interim basis.

Speculation raged earlier this summer that Bartz’ days were numbered when Yahoo announced weak Q2 financials.

She’ll be remembered for brokering the Yahoo-Microsoft search and ads deal that effectively put Yahoo out of the search engine business (aside from display; Yahoo’s search results have been powered fully by Microsoft).

We’ll have more on this as information becomes available.

Postscript: Yahoo has now confirmed Bartz’ departure. The company has issued a news release saying that Yahoo’s Board of Directors removed her from the position, and appointed Morse as her interim replacement, effective immediately. There’s also a new, six-person Executive Leadership Council that will help Morse with day-to-day management and contribute to “a comprehensive strategic review that the Board has initiated to position the Company for future growth.”

Roy Bostock, Chairman of the Yahoo! Board, said, “The Board sees enormous growth opportunities on which Yahoo! can capitalize, and our primary objective is to leverage the Company’s leadership and current business assets and platforms to execute against these opportunities. We have talented teams and tremendous resources behind them and intend to return the Company to a path of robust growth and industry-leading innovation. We are committed to exploring and evaluating possibilities and opportunities that will put Yahoo! on a trajectory for growth and innovation and deliver value to shareholders.”

On a related note, Glassdoor — a site where employees can share information and opinions about companies anonymously — says Bartz’ approval rating was at 33% for the 3rd quarter of 2011, and had dropped as low as 24% during Q2 (based on those employees who chose to speak out on the site).

For more background on Bartz’ tenure at Yahoo, see the related articles listed below.

Google To Hire 6,000 Plus, While Yahoo Cuts Additional 1%

Barry Schwartz — Tue, 25 Jan 2011 20:02:58 +0000

Google announced they are hiring. Last year they hired about 4,500 new Googlers. This year they are expected to hire over 6,000 new employees, according to the Mercury News. Eric Schmidt, Google’s current CEO, said 1,000 will be hired in Europe.

Google’s latest earnings report had Google’s headcount at 24,400 full-time employees as of December 31, 2010. Adding an additional 6,000 employees will put Google at over 30,000 employees.

Alan Eustace, Google’s SVP Engineering and Research, said “I am excited about 2011—because it will be our biggest hiring year in company history. We’re looking for top talent—across the board and around the globe—and we’ll hire as many smart, creative people as we can to tackle some of the toughest challenges in computer science.”

Meanwhile, Yahoo is laying off an additional one-percent of their staff today. Yahoo told AllThingsD:

The personnel changes we are making are part of our ongoing strategy to best position Yahoo! for revenue growth and margin expansion and to support our strategy to deliver differentiated products and experiences to the marketplace. We’ll continue to hire on a global basis to support our key priorities.

Today’s action impacts approximately 1% of the global employee base.

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Tim Mayer: Search Vet & Ex-Yahoo Lands At Trada

Matt McGee — Tue, 11 Jan 2011 13:00:31 +0000

Tim Mayer, a former Yahoo and longtime search industry veteran, has landed a new role at Trada, the crowdsourced SEM marketplace based in Colorado.

Mayer joins the company as its Chief Strategy Officer, and will oversee sales, marketing, product development and operations. Ben Wright, another ex-Yahoo, is also joining Trada as its VP of Service Delivery and Marketplace.

For Mayer, this latest position expands on a lengthy career that’s seen him work at several of the web’s early search engines. As Danny Sullivan detailed last summer when Mayer left Yahoo, that career began at RealNames and included stops at Inktomi, FAST Search, Overture and eventually Yahoo. He was one of Yahoo’s most public search employees over the past seven years.

Trada’s paid search marketplace matches advertisers and its community of more than 1,000 freelance search marketers. The company formed in late 2008 and launched its marketplace publicly last March.