Did Yahoo pick the wrong new CEO?

Former PayPal president Scott Thompson is Yahoo&#039;s new CEO, which sends the signal that the tech giant wants to focus on rebuilding instead of selling, critics say.

(Image credit: Kim Kulish/Corbis)

last updated 11 January 2015

Four months after CEO Carol Bartz was brutally fired over the phone last fall, Yahoo has named a replacement. The company's board has tapped Scott Thompson, the chief of eBay's PayPal payment service, to lead the struggling internet portal out of troubled waters. Given that Thompson doesn't have a background in media and advertising, many are questioning whether he's really the right man for the job. Did Yahoo pick the wrong new CEO?

Absolutely. He doesn't know Yahoo's business: In 2011, Yahoo rebranded itself as a "premiere digital media company," says Nicholas Carlson at Business Insider. Funny then that it's "hired a product manager to be its CEO, not a media or advertising executive." Thompson didn't exactly inspire confidence when, in his first call with analysts and investors, he flat-out admitted to knowing next-to-nothing about display advertising, which is how Yahoo makes most of its cash.

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He doesn't know how to fix a broken company, either: Yahoo's directors seem to be saying they want to rebuild the company, not sell it, analyst Rob Enderle tells Computerworld, but that really makes Thompson an odd choice. "Their ideal candidate would be someone who recently turned around a company," but when Thomspon joined PayPal it was already in good shape. He may think he can fix Yahoo because he has no idea what the job entails, "where a more experienced CEO might have run for the hills."

Actually, he just might be what Yahoo needs: Thompson brings Yahoo tech and the operations know-how it needs, analyst Gil B. Luria tells the Associated Press. He's "the guy who helps build the clock as opposed to tell the time," and took PayPal from an "emerging startup" to a "large, fast-growing and predictable payments company." That, says the AP, is the sort of growth Yahoo will need if it's going to make a comeback. And Thompson is a "collegial leader" employees like working for, a welcome contrast to Bartz's harsh management style.

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