Yahoo chief executive Scott Thompson has been removed in an effort to clean up a mess created by a misleading resume that destroyed his credibility as he set out to turn around the long-troubled Internet company.
Ross Levinsohn, a 48-year-old executive who oversees Yahoo’s media and advertising services, is to take over as interim chief executive.
Yahoo lured Thompson away from eBay’s PayPal in January in the hope of ending a financial funk that has depressed the company’s stock for years.
Although Yahoo remains one of the Internet’s most-visited Web sites, the company’s financial and stock performance has suffered in the face of competition from companies like Google and -Facebook. The firm has exasperated investors who have seen Yahoo go through four full-time chief executive in less than five years without delivering on repeated promises to revive revenue growth.
Thompson’s abrupt exit after just four months came as part of the latest shake-up of Yahoo’s board of directors, which has been in a state of flux for several months.
Yahoo chairman Roy Bostock and four other directors who had already announced plans to step down at the company’s annual meeting later this year will leave immediately.
All five of those directors signed off on the hiring of Thompson, a move that reflected badly on them when a recent revelation highlighted an inaccuracy in his educational background.
Three of Yahoo’s vacated board seats will be filled by activist hedge fund manager Daniel Loeb, a disgruntled shareholder who dropped the bombshell that led to Thompson’s departure, and two of his allies, former MTV Networks executive Michael Wolf and turnaround specialist Harry Wilson.
Alfred Amoroso, a veteran technology executive who joined Yahoo’s board just three months ago, replaces Bostock as chairman. After all the changes have been finalized, Yahoo will have 11 board members.
The appointment of the new directors ends a potentially disruptive battle with Loeb, who was waging a campaign to gain four seats on the company’s board. He eventually settled for three seats and the satisfaction of ushering out Thompson, who antagonized Loeb in late March by telling him he was not qualified for the board.
In a statement issued through Yahoo, Loeb said he was “delighted” to join the Yahoo board and promised to “work collaboratively with our fellow directors.”
Loeb’s fund, Third Point LLC, has invested about US$1 billion to build a 5.8 percent stake in Yahoo.
Although Yahoo Inc gave no official explanation for Thompson’s departure, it was clearly tied to inaccuracies that appeared in his biography on the company’s Web site and in a recent filing with the US Securities and Exchange Commission.
The bio listed two degrees — in accounting and computer science — from Stonehill College, a small school near Boston.
Loeb discovered that Thompson never received a computer science degree from the college and exposed the fabrication in a May 3 letter to Yahoo’s board.
The revelation raised questions about why the accomplishment had periodically appeared on his bio in the years while he was running PayPal, an online payment service owned by eBay Inc.
Yahoo initially stood by Thompson, brushing off the inclusion of the bogus degree as an “inadvertent error,” but harsh criticism from employees, shareholders and corporate governance experts prompted the board to appoint a special committee to investigate how the fabrication occurred.