Flagging former Web great Yahoo shocked the tech world on Wednesday by announcing it had finally appointed a new CEO to lead the company’s latest turnaround attempt: Scott Thompson, the current president of PayPal.
“Yahoo! is an industry icon and I am very excited about the prospect of working with one of the great teams in the online world to deliver Yahoo!’s next era of success,” Thompson said in a statement released Wednesday.
The news confirmed a report by All Things D‘s Kara Swisher on Tuesday. Swisher observed that Thompson had recently “Liked” Yahoo on his Facebook page.
The choice of Thompson was intriguing in-and-of itself, as his soft-spoken demeanor is about the furthest away one can imagine from Yahoo’s previous bombastic, profane CEO Carol Bartz, who was ingloriously fired by the board of directors via a telephone call in early September 2011, as she memorably shared with Yahoo’s employees via an email from her iPad.
But the decision to name Thompson as CEO is perhaps most surprising due to the fact that Yahoo had taken such a long time to name Bartz’s replacement: A four month period of uncertainty, during which time Yahoo had even reportedly suspended, or even given up its search for a CEO and was rumored to be contemplating breaking up the company and/or taking it private.
Thompson’s ascent won’t change at least one part of that plan: Yahoo is still plowing ahead with its decision to “monetize” (sell) its Asian assets — China Yahoo! and Yahoo! Japan — according to Yahoo Chairman Roy Bostock.
But in a conference call held Wednesday morning following the announcement and designed to re-inspire investor confidence, or at least soothe some nerves, Bostock and Thompson adamantly maintained that Yahoo would remain a public company and that no employees would be fired — yet.
“We do not envision us not being a public company going forward,” said Bostock on the call, “[Going private] is not on the radar screen…We’re going to continue to run this as a public company for the benefit of shareholders.”
When asked about possible turnover as a result of the new transition, Thompson also attempted to reassure employees that their jobs were safe with him in charge.
“People determine whether you’re able to win or lose in this business,” Thompson said, “[With] all the talent we have in this organization, I want to make sure we’re here tomorrow, a month from tomorrow, and a year from tomorrow.”
And seemingly diffusing rumors of a possible buyout by, of, or merger with any other tech company — Former 90s all-stars AOL and Microsoft had been among the names rumored by the press — Thompson stated: “I don’t have anything I feel good about saying regarding content acquisition…But I feel extremely confident about the people, the talent, the team,” at Yahoo as it relates to digital content.
Analysts from investment banks JP Morgan and Credit Suisse, to name a few, also repeatedly pressed Bostock and Thompson for clarification on Yahoo’s specific plans for the future. But Thompson, pointing out that he had just been appointed, stated he needed at least a little bit of time to understand the business before making any concrete pronouncements.
“I’ll be a sponge as it relates to things I don’t know” about Yahoo, Thompson said.
Still, Thompson was able to paint in broader strokes where he saw the future of Yahoo. Namely, three large, overlapping digital businesses arenas: Content, mobile and display advertising.
The latter point — display advertising — is particularly important, as it makes up about half of Yahoo’s overall business and has seen a sharp slowdown in growth over the past two quarters, netting $449 million in the third quarter of 2011, no change from a year prior.
To make matters worse, Facebook overtook Yahoo in 2011 to become the largest online display advertising company by dollars earned, market share and numbers of advertisements shown, reaping an estimated $2.19 billion from U.S. ad sales alone, according to research firm EMarketer. That trend is only poised to continue in 2012, with Google also challenging Yahoo for display ad market share.
“I have every expectation [Thompson] will be calling out to advertisers and getting to know their needs,” said Bostock.
When asked what Yahoo would do to remain competitive in the display ad space alongside the rise of Facebook and Google, Thompson said it was too early to talk specifics but said that “the ability to use technology and analytics to drive better outcomes” would be key to Yahoo’s approach.
Thompson also argued that Yahoo’s existing assets continue to acquire a wealth of data about user experiences online that has yet to be effectively harnessed, but promised that he would dive deep into it and figure out a way for Yahoo to monetize it.
“I’ve only gotten a glimpse at how much data all these wonderful [Yahoo] businesses have gathered,” Thompson said. “I’m confident that the data will be exploitable for next generation products that will be super competitive in the display advertising space. Down in that data, we’ll find ways to compete and innovate that the world hasn’t seen yet.”
And though they seemed in synch about most aspects of Thompson’s new job, Thompson and his new boss, Bostock, seemed to have at least slightly different ideas about where Yahoo is at present.
“Looking at Yahoo, I’m not sure if I would call it a turnaround,” said Bostock, “What we need to do is take our existing strong assets and build on the assets.” Bostock added that he thought Yahoo over the last several years had “treaded water,” and needed to begin swimming fast.
Meanwhile, Thompson seemed to have a more cynical view of where Yahoo currently stood in the current online marketplace, but a more optimistic view of its future.
“I want to return the business to being one of these great iconic brands,” said Thompson later, “My core belief is that while the Internet has changed a lot in the last two decades, over the next five to ten years, it’s almost hard to imagine the implications…Yahoo will participate in that. We’ll be back to innovation, back to disruptive technologies.”
No word yet on whether Thompson’s tenure will include a restoration of the iconic Yahoo sign that graced commuters along San Francisco’s Bay Bridge for the past 12 years, until it was torn down in late December 2011.
