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PayPal's Thompson to Fill Yahoo's Leadership Vacuum

By Rob Spiegel
Jan 4, 2012 2:34 PM PT

Yahoo finally gets a leader. The company announced Wednesday the appointment of Scott Thompson as CEO, effective Jan. 9. Thompson was also appointed to the board of directors. Interim CEO Tim Morse will resume his role as chief financial officer. Yahoo fired former CEO Carol Bartz four months ago for failing to turn the company around.

PayPal's Thompson to Fill Yahoo's Leadership Vacuum

Thompson's most recent post was president of eBay's PayPal. Under Thompson's lead, PayPal expanded its user base from 50 million to more than 104 million active users since 2008.

Yahoo's light has dimmed in recent years, and the once-powerful Internet giant now has trouble fighting for ad dollars against the fierce competition of Google and Facebook. Thompson will be tasked with turning around Yahoo's core business, including its media and advertising assets, and he will work closely with the company's board on strategy development, noted Chairman Roy Bostock.

Thompson's appointment partially squelches rumors that Yahoo's board has been looking to sell the company. Yahoo will remain a publicly traded company, Bostock said Wednesday.

Yahoo did not respond to our request for further details.

For PayPal, losing Thompson at this time could be a blow. Thompson has helped PayPal grow, and now the company is at a crossroads with the shift to mobile platforms.

A Good Fit

Though Thompson lacks media experience, that may not hinder him from leading Yahoo effectively. He has other skills that may be more important.

"I see the hiring of a technology and operations CEO as a good sign," Azita Arvani, principal of the Arvani Group, told the E-Commerce Times. "I believe that Yahoo has been struggling in its technology area for a while."

An online media company -- "any media company, for that matter" -- must have a strong technology foundation, she noted. "Thompsons's leadership can be a welcome addition to focus more on building up Yahoo's technologies. That's what Yahoo would need to revive its media business."

Chief Money Maker

Another strength Thompson brings to Yahoo is his experience in driving revenue and improving the bottom line. This could be a big plus in turning Yahoo around.

"Thompson's background at PayPal is intriguing, because it may give him grounding in issues of actually making money," Steven Savage, technology project manager and Geek 2.0 blogger, told the E-Commerce Times. "He's a good choice, especially to turn around advertising."

Thompson has an impressive level of experience and reputation, but "ironically, I'm not sure either experience or reputation is his biggest advantage," remarked Savage. "What he really needs is courage and vision."

A New Course?

As Thompson takes the helm, the direction he steers the company in will be critical.

"A major focus for Thompson should be turning around advertising revenue -- that's it," said Savage.

Thompson will aim first to plug the hole and get Yahoo profitable and stable -- not so much a new direction, he acknowledged.

With a new CEO, Yahoo may be able to attract a stronger team.

"Another major focus will be hiring," said Savage. "If Yahoo focuses on becoming a talent powerhouse, that may help the company survive."

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