Scott Thompson, formerly the president of PayPal, is Yahoo’s new CEO. The reaction of the financial press to the news was mostly positive. Many praised the job Thompson had done at PayPal, but some questioned whether he was a good choice for Yahoo, given his lack of media experience.
PayPal, under Thompson’s watch, experienced spectacular growth, more than doubling the number of users from 50 million to 104 million and growing revenues from $1.8 billion to more than $4 billion. In fact, PayPal grew at a faster rate than its parent company, eBay. For the last quarter of reported income, PayPal’s revenues grew more than twice as fast as eBay’s, compared to revenues from a year before.
In a conference call on January 4, the day Thompson’s appointment was announced, Roy Bostock, Yahoo’s chairman of the board, said Yahoo has been “treading water.” Bostock said that Thompson had proved at PayPal that he could build the business of a company that had solid assets. Like PayPal, Yahoo also has a wealth of assets. Now it needs someone who can help it grow.
In a press release issued January 4, Bostock stated “Scott [Thompson] 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 at Yahoo! … 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.”
Yahoo’s last CEO, Carol Bartz, was released in early September, 2011, after less than three years on the job. She had taken over from Jerry Yang, who was one on the original founders of the company. The board was dissatisfied with Bartz’s performance because the company’s revenue growth was stagnant.
Scott Thompson received a bachelor’s degree in accounting and computer science from Stonehill, a small Catholic college near Boston. He has a lot of experience applying technology in financial institutions. Before joining PayPal, he worked in information technology for the accounting firm Coopers and Lybrand, and he was the chief information officer for Barclays Global Investors. He was also executive vice president of technology solutions at Inovant, a subsidiary of Visa. He started at PayPal as the chief technology officer before becoming the company’s president.
What he doesn’t have is a background in media, and some pundits wonder whether that will be a problem. Yahoo is both a technology company, because it is on the Internet, and a media company, because it is a major provider of content.
Yahoo may also be selling off some of its assets. The company is being cagey about what its plans are, but it has already received offers to buy part of its assets, and it may even be considering an outright sale of the whole company.
Thompson’s appointment will be official on January 9, 2012. At that time, the current acting CEO, Tim Morse, will go back to being Yahoo’s chief financial officer.