CBSN

Yahoo turns to PayPal exec as latest savior

Scott Thompson
PayPal

Updated: 10:30 AM NEW YORK - Can a former PayPal exec succeed where others - many others - have failed?

We'll soon find out now that Yahoo has officially named Scott Thompson, president of eBay Inc.'s PayPal division, as its new CEO. The struggling Internet company has been without a permanent CEO since early September, when it fired Carol Bartz after losing patience with her attempts to turn around the company during her 2-and-a-half years on the job. Tim Morse, Yahoo's chief financial officer, has been interim CEO.

In a press release, board chairman Roy Bostock said Thompson brought with him 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."

That's mild understatement given the ongoing inability of any single executive to lead this company. Over the last decade, Yahoo turned to various people - including Tim Koogle, Terry Semel, Jerry Yang and Bartz - hoping they could supply a steady hand at the helm. All were ultimately forced to relinquish their power as CEO.

Yahoo: Press release
ZDNet: 5 big challenges for Yahoo's next CEO

During a mid-morning press conference where he was introduced to the media as Yahoo's newest CEO, Thompson described Yahoo as "one of the great iconic brands of the Internet," adding that his immediate plans centered around "knowing the team" that he has inherited.

Thompson, who comes to the job with a reputation as a technologist, noted that successful Internet companies are those that can "build great innovative products and put them inside customer experiences that the customer actually enjoys." He said that he would try to take that approach at Yahoo to generated "great content through great customer experience" in a bid to generate deeper customer engagement.

Though short on details, Thompson promised that Yahoo would deliver a "series of great next-generation products" in the coming years, adding that Yahoo wanted to "be great across all devices," in particular singling out the fast-growing popularity of mobile platforms among users.

Thompson has served as president of PayPal, eBay's online payment service, since January 2008, according to his bio on eBay's web site. He previously served as PayPal's senior vice president and chief technology officer.

Since Bartz's departure there has been considerable speculation about Yahoo's future. In November, Microsoft Corp. signed a nondisclosure agreement so it could gain a seat at the negotiating table if Yahoo decides to sell part or all of its business.

Microsoft unsuccessfully tried to buy Yahoo in 2008 for as much as $47.5 billion before walking away in frustration. Yahoo's stock is now worth less than half of Microsoft's last offer of $33 per share. Yahoo shares closed at $16.29 per share on Tuesday.

Two weeks ago, reports said Yahoo was inching closer to selling most of its holdings in China and Japan in a proposed deal valued at about $17 billion.

It is believed that Yahoo has been looking to make a move to satisfy frustrated shareholders. Its U.S. business has lost its luster as the company's website loses traffic and advertising revenue to Internet search leader Google Inc. and Facebook's social network.

Yahoo's board also reportedly pondered selling a 20 percent stake to buyout firms or even auctioning off the entire company. It recently appeared that Yahoo's nine-member board was leaning toward selling a large stake to a group led by Silver Lake Partners for $16.60 per share or TPG Capital for $17.60 per share. But that idea reportedly didn't go over well with some of Yahoo's major shareholders, including hedge fund manager Daniel Loeb, who has been threatening to overthrow the company's board.

The news of Yahoo's choice was first reported by the All Things Digital blog. Coincidentally, Thompson tipped the news when he recently "liked" Yahoo on his Facebook page.