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VIDEOYahoo's New CEO Scott Thompson: 5 Things You Need to Know
By
Michael Comeau
Jan 04, 2012 1:10 pm
Yahoo has named Scott Thompson, former president of PayPal, as its CEO. Is he up to the job?
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Is Mr. Thompson equipped to restore Yahoo to its former glory days as an Internet superstar?
Or is he destined to flop as the Web is overrun by the rapidly growing techno-beast that is Google (GOOG), and social media wunderkinds like Facebook and Twitter?
Here's what you need to know:
1. Scott Thompson Sounds Way Nicer Than Carol Bartz
Yahoo's former firebrand CEO Carol Bartz was known the world over for cursing out TechCrunch founder Michael Arrington, threatening to "drop kick to %$@#ing Mars" employees who leaked anything to the media, and generally creating an uncomfortable working environment at Yahoo.
On this morning's call, Thompson came across as enthusiastic, energetic, and not at all combative -- something that the troops at Yahoo probably appreciate following the chaos created under Bartz' watch.
2. He's an IT Guy
The media is gushing over Thompson's stint at PayPal, but he only ran it from 2008 -- when it was already the dominant force in peer-to-peer payments. Prior to that, he was an IT guy. He has served as PayPal's chief technology officer, executive vice president of Technology Solutions at Visa (V) subsidiary Inovant, and chief information officer of Barclays Global Investors.
In fact, I see the board's decision to go with an IT guy as the driver of Yahoo's underperformance versus the NASDAQ (^IXIC) today. Like Bartz, who had previously run CAD-software maker Autodesk (ADSK), Thompson is not a consumer products or media maven -- something that's vitally needed to compete with the social media powers.
3. Running PayPal Wasn't a Small Task
PayPal may seem like a mere beneficiary of a network effect, but no one should discount the complexity of running such a company.
There's a lot more going on there than meets the eye. PayPal has to combat fraud, deal with a litany of regulatory issues across the globe, and manage what is likely an astoundingly complex technology back-end -- not just move money from point A to point B.
So at least from an operational standpoint, Thompson should be able to hit the ground running.
4. This Was a Big Surprise to eBay
On eBay's company blog, CEO John Donahoe indicated that he learned of Thompson's decision to head to Yahoo yesterday afternoon.
This means that Thompson, who starts at Yahoo on January 9, gave less than a week's notice that he would no longer be running PayPal, eBay's most important business unit.
Donahoe will run PayPal until a new boss is found, but eBay had better start looking quickly, especially with newer, nimbler competitors like Square and Dwolla on the horizon.
5. Thompson Won't Be a Catalyst for the Sale of Yahoo's Asian Assets
Yahoo is up 44% since its August lows, largely on anticipation of a deal to sell part or all of Yahoo's Asian assets like Yahoo Japan and its Alibaba stake.
Unfortunately for Yahoo bulls, nothing on the call indicated that Thompson was brought on board to catalyze a transaction. Also, Yahoo chairman Roy Bostock specifically shot down the idea of Yahoo going private, eliminating another reason to send the stock higher.
The Verdict?
Scott Thompson is a bright and capable executive, but his IT background doesn't seem quite right for a company that's struggling to find its way on a social-dominated Web and transition to a media powerhouse.
So for now, it's wait and see. The first step will be to see if Thompson can clarify a vision for Yahoo's role on the Web to advertisers, shareholders, and most importantly, consumers hooked on Facebook and Twitter.
Bartz, during that infamous exchange with Arrington at the 2010 TechCrunch Disrupt conference, was asked, "What is Yahoo?"
Her response was this:
What is Yahoo? Yahoo is a company that is very strong in content. It’s moving towards the web of one. We have 32,000 variations on our front page module. We serve a million of those a day. It’s all customized. Our click-through rate went up twice since we started customizing this. People come to check the things they like. You can just get it together. Yahoo is one site people always stop at.
If Thompson can answer this question more effectively, then he's got a shot.
Twitter: @MichaelComeau
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