Yahoo names ex-PayPal boss Thompson new CEO
NEW YORK — Yahoo on Wednesday named PayPal’s Scott Thompson its new chief executive, saying he would recharge growth at the Internet giant that has been losing the battle over online ads.
Thompson said he aimed to boost Yahoo reader traffic to attract more advertisers, arguing that the company’s assets were underappreciated by the market.
But, under the gun from dissatisfied shareholders, the company also left the door open to selling off pieces, after months of fielding approaches from Asian partners, private equity investors and giants like Microsoft.
Thompson was named four months after the company sacked his predecessor Carol Bartz over her unsuccessful efforts to turn the company around.
Yahoo said Thompson would focus on the company’s core business and work with the board to “identify the best approaches for the company and its shareholders.”
“His deep understanding of online businesses combined with his team-building and operational capabilities will restore the energy, focus, and momentum necessary to grow the core business and deliver increased value for our shareholders,” chairman Roy Bostock said in a statement.
Thompson was until Wednesday’s announcement head of the large online payments firm PayPal, a key unit of eBay. There he is credited with expanding the business beyond eBay’s buyers and sellers to serving other online retailers and wholesalers.
He told analysts Wednesday that Yahoo needs to build visitor traffic to its websites and hold onto it.
“To me Yahoo’s core business is providing a great experience for our users. Everything comes from that,” he said.
“With a solid base of advertisers, it presents both a huge opportunity and a great challenge,” he said, adding that “Speed is critical of course.”
But he was reticent to say just how he would do that. Yahoo has strong content and popular websites, but has still been losing business to search giant Google, social networking king Facebook and specialized websites.
Yahoo’s shares have sagged below the $20 line since the company rebuffed a generous takeover overture, of more than $30 a share, from Microsoft in early 2008.
Bartz who was fired in early September after less than three years in the job, blamed for failing to build earnings and investor returns and recover market share.
But she and some major shareholders blamed a lack of leadership and direction from the board of directors, which includes Yahoo co-founder and former chief executive Jerry Yang.
Bartz herself blasted her overseers as “the worst board in the country” after being pushed out the door.
Yahoo has since then embarked on a “strategic review” and rumors have swirled about possible takeover offers from Microsoft, various private equity firms, as well as China’s Alibaba, partly owned by Yahoo and one of its most valuable assets.
The company has also mulled selling off its hugely valuable stakes in Alibaba and Yahoo Japan.
Bostock confirmed that selling parts of the company could be part of Thompson’s job.
“Yahoo is considering a wide range of opportunities for the company’s business, as well as specific investments or dispositions of assets,” he said.
Trip Chowdhry of Global Equities Research said Thompson’s PayPal background could help take Yahoo in the still-open market of payments made with mobile phones, after having lost battles in the search, advertising and social networking businesses.
“Whatever Yahoo is doing today is getting to be irrelevant by every day,” Chowdhry said.
“Under the new CEO, Yahoo should be focused on defining the 4th Generation of Internet wave — which is mobile payments.”
But he also called for the complete overhaul of the Yahoo board including Yang.
Yahoo shares fell 2.4 percent during trade Wednesday, while eBay’s dropped 3.7 percent.
EBay announced that its chief executive John Donahoe will assume Scott’s responsibilities until a new PayPal chief can be recruited.