Mr. Thompson will have to rejuvenate a once-great internet
business that Mr. Bostock admitted has been "treading water" in
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
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
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%
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.