Issue of the week: Has Yahoo found its Mr. Fix It?

last updated 8 January 2015

“Scott Thompson just took on the Toughest Job in Technology—running Yahoo,” said Chris O’Brien in the San Jose Mercury News. The former president of PayPal has been named Yahoo’s fourth CEO in five years. His task now is to give the struggling Internet company a coherent strategy, something a string of promising leaders has failed to do. With 700 million online visitors a month, Yahoo doesn’t want for an audience, but its identity mood swings—“We’re a search company! We’re an entertainment company! We’re a media company!”—have rendered it “gradually less compelling to users and advertisers.” That makes Thompson’s job all the more challenging: How do you turn around a company that isn’t collapsing but is simply “eroding slowly” as Facebook and Google gallop ahead?

Thompson may have won plaudits for PayPal’s success, but he is “something of an odd choice” for Yahoo, said The Economist. His background includes neither search nor online advertising, Yahoo’s main businesses, and he “has little experience of righting sinking ships.” But Thompson boasts “solid operational and technology chops,” said James Temple in the San Francisco Chronicle, not to mention a “heavy Boston accent so out of place as to seem endearing in Silicon Valley.” Right now, Yahoo needs a “cultural overhaul, not a strategic tweak,” and perhaps only someone with an unexpected résumé can nurture the innovation the company needs to recharge.

One of the first things Thompson needs to figure out is what kind of business Yahoo should be, said Kit Eaton in Fastâ€‹Company.com. “Yahoo’s brand identity is fuzzy, old, and possibly even tainted” by its Internet dinosaur status, so the company desperately needs to figure out how to make itself indispensable. Its track record here is bad: Yahoo was a groundbreaker in the early Internet age, but today “nobody says ‘I’ll Yahoo that.’” By taking a chance on innovative products and risky technologies, Thompson might be able to get this lumbering giant ahead of the Web curve. He’s already said that he’s willing to push new services, said JP Mangalindan in Fortune. If he’s smart, he’ll also better capitalize on the company’s wealth of data; there is surely untapped potential in analyzing how 700 million users interact with Yahoo’s content and ads. Yahoo may be unfocused, but by honing its mission and cutting some weak assets, Thompson can restore the company’s former luster.