Yahoo has ended four months of searching for a new chief executive by appointing former Paypal head Scott Thompson to the position.
He replaces Carol Bartz, who was forced to quit by the Yahoo board in September after failing to turn around the company’s flagging fortunes. Yahoo's share price has hovered around $15 ever since late 2008, after then CEO Jerry Yang rejected an offer to purchase from Microsoft of $33 a share.
"Scott brings to Yahoo a proven record of building on a solid foundation of existing assets and resources to reignite innovation and drive growth, precisely the formula we need," said Yahoo chairman Roy Bostock.
Investors gave the news a cool reception, with shares in Yahoo down 3.1% at the close of trading in New York yesterday, but the company’s board is hoping Thompson will repeat the success he had at the payments division of eBay, where the user base has doubled during his three-year leadership, according to the BBC.
But Thompson’s strong technology credentials are being tempered by his lack of experience in the media and advertising businesses, according to the Financial Times.
The paper quotes Thompson as saying Yahoo has a “solid foundation” on which to build, including more than 700 million users. He promised to make a return to high growth his top priority.
Tim Morse, who has been acting chief executive, is to return to his position as chief financial officer.
Morse was among the Yahoo executives appointed by the board to oversee a strategic review to identify and fix the reasons the company has failed to keep up with its rivals.
Analysts say Yahoo’s domination of webmail is under threat as users move to social media sites such as Facebook and Twitter.
Bostock said Thompson would focus on Yahoo's core businesses, but would work closely with the board on its strategic review of what business lines to close and what new investments to make.
Analysts say Thompson, who steps into the chief executive role on 9 January, will have to choose to either focus on product innovation or on media by promoting Yahoo as a content hub.
They say Yahoo has spread itself too thinly in terms of management and technology in trying to compete with Microsoft, Google, AOL and others all at the same time.
Picture: John Linwood