Yahoo this morning named PayPal President Scott Thompson as its chief executive, four months after axing mercurial CEO Carol Bartz.
On a conference call, Yahoo Chairman Roy Bostock cited Mr. Thompson's "impressive track record as a business leader taking existing online businesses and building them up."
Mr. Thompson will have to rejuvenate a once-great internet business that Mr. Bostock admitted has been "treading water" in recent years.
On the call, Mr. Thompson said that Yahoo must continue to focus on both technology and content -- "not one or the other." He repeatedly referred to Yahoo sites' monthly visitor metrics as proof of a great content foundation on which to build. But, perhaps disappointingly for the advertising community, he said it was too early to talk specifically about what changes Yahoo needs to make to reinvigorate its stagnant display-advertising business.Mr. Thompson also said that data analysis from Yahoo's giant user base would be critical to its future innovation.
The appointment of Mr. Thompson, whose background is in tech and products rather than media, came as a surprise to current as well as former Yahoo execs. Still, they expressed relief to have someone at the helm.
"I love his background," said one current Yahoo official. "He's a CTO guy, a product guy. He doesn't look like a front-line advertising guy, but we have a lot of advertising guys. Now I feel better about shoring up the product and engineering parts of the company and setting the strategic vision there."
A former executive at the company wrote in an email: "Great for the platforms, consumer-facing product biz. [But] they better lock in Ross Levinsohn ... so they have a real media leader, given that Yahoo has been positioning itself as the leading digital-media company."
Curt Hecht, CEO of Vivaki Nerve Center, a unit of Publicis Groupe , doesn't see Mr. Thompson's lack of content or advertising experience as a disadvantage."The reality is that someone from [Silicon Valley], who understands technology, is critical to the success of Yahoo in terms of future strategy, attracting the right engineering and product development talent," Mr. Hecht wrote in an email. "Also, [his] coming from eBay should make for an easier cultural transition on both sides since they come from the same digital generation. ... The key questions remain [strategy, implementation and talent acquisition], but he looks well suited."
Yahoo's premium display advertising grew in the low-single-digit percentage points in the third quarter of 2011, interim CEO Tim Morse said on an October earnings call. Its overall display revenue was $449 million in the period, basically flat with $448 million a year earlier.
Yahoo was expected to end 2011 with 13.1% of the market vs. Facebook's 17.7%, according to eMarketer. In 2012, Facebook's share is forecast to rise to 19.4%, while Google is expected to get to 12.3% -- almost even with the projected 12.5% for Yahoo.
Mr. Thompson joined PayPal in 2005 as chief technology officer. He became president in 2008 and grew the company, owned by eBay, to a $4 billion from an $1.8 billion business. He had previously worked at Visa USA and a subsidiary, Inovant, formed to oversee global technology.
But Mr. Thompson is far from a Silicon Valley lifer and acknowledged some culture shock on coming there from a traditional financial services company. There, "you can't just let developers come in and open accounts and move money around," he told Wired in 2010, speaking of a PayPal initiative to create an open developer platform.
Several news outlets have reported that Yahoo has been in discussions to sell some stakes in its Asian assets and has at least two offers from private-equity firms to buy large pieces of Yahoo. On the conference call, Mr. Bostock said Yahoo plans to remain a public company.