Yahoo 6.0 – A New CEO Is Born

Yahoo hired PayPal President, Scott Thompson as their new CEO. I think on one level this is wonderful. Bring in a tech executive that is great at team building and has an outwardly positive appeal to rebuilding the brand of Yahoo! However, that’s the end of my optimism. The Yahoo board wants to bring someone on board who can quickly evaluate what they have and make it more appealing to investors. I believe, this will fail. Not because Scott has no advertising experience (doubling PayPal’s user base 50M to 104M doesn’t count in my book) which he clearly does not. In fact he was cited in an article, “I readily admit what I don’t know and am ready to learn and rely on Yahoo’s great team.” Really? Great team? A considerable effort needs to connect to the advertisers back to the business (which will take a change agent). If this is not achieved, you’ll miss another quarter and drive the stock price lower. Not because as reported in the WSJ Yahoo owns ~40% stake in Alibaba and Yahoo Japan makes up a huge slice of Yahoo’s overall market share and Jack Ma, Alibaba’s CEO still wants to buy back the stake in his firm but can’t get Yahoo to sell it to him. Not because Yahoo has alienated many of their prospects by restricting remnant sales of Right Media to buyers with a direct seat rather than resellers while it simultaneously created an ad alliance with MSN and AOL (hello, confusing). Not because Yahoo continues to lose ground to Google, Facebook and YouTube with total unique (comScore in November noted that Yahoo was down 3.6% YOY% which the rest were up). Not because the Yahoo board is still putting efforts into selling/breaking up the company to drive increased shareholder value. Which by hiring a new CEO seems to have potentially placed this on the back burner and if Mr. Thompson cannot change the company quickly, could drive the stock price lower? BUT, because of all these issues above plus the 20+ more that has not been brought up in this post will only (as I believe) lower the stock price and drive down shareholder value. As a 10 year veteran of this industry, it pains me to watch this train wreck happen.

Steve Jacoby

Managing Director Search and Media Strategy


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