Yahoo Hires Paypal President Scott Thompson to Become New CEO

 Yahoo’s board announced on Wednesday that Paypal President Scott Thompson was hired to become Yahoo’s new CEO, the fourth Yahoo CEO in five years.

Thompson joined Paypal in 2005 and helped the company to increase Paypal’s revenues to over 4 billion in 2011, up from 1.8 billion in earlier years. By expanding Paypal’s reach to include other payment methods beyond online auction giant eBay, Paypal has essentially become a one stop hub for online payment transactions, which is now among the largest on the web.

As Yahoo’s new CEO, the pressure is on Scott Thompson to expand Yahoo’s reach and take it to new heights as he previously accomplished at Paypal.

While Yahoo has an impressive audience of 700 million online visitors per month visitors, the largest U.S. Internet portal, with a market cap of 19.57 billion and revenues totaling 4.4 billion, the company is losing market share to Facebook and Google in display advertising while also losing relevance in the minds of tech users.

Digitial Media or Technology Company?

Yahoo is a widely recognizable name that is known for providing diverse online content ranging from finance, health,  sports, media, and entertainment. But over the years the company has been unsuccessful in terms of solidifying their identity in a rapidly evolving tech industry.

During the past several years, Yahoo has broadened its focus through a 40 % acquisitional stake in Alibaba, a Chinese internet company. Alibaba CEO Jack Ma, who has deep roots in Yahoo and is also on the Yahoo board of directors, has tried unsuccessfully to re acquire his 40% stake from Yahoo.

Sound complicated?

Yahoo, with all of its internal twists and configurations, is difficult to figure out, even for experienced tech followers.

In 2008 Yahoo’s board of directors spurned Microsoft’s hostile takeover bid for the lofty price of $44.4 billion and then later reached an agreement with Microsoft in 2010 to allow Microsoft’s search engine Bing to operate its search engine and accumulate greater search revenues.

Forging Ahead As Yahoo CEO

During Wednesday’s conference call, Yahoo CEO Thompson spoke about Yahoo’s role to provide good mobile content to their users.

“When a consumer has a choice and wants to consume content, the very first place they choose to go is the Yahoo experience” Thompson said. Coming from an unglamorous tech background at Paypal while lacking an imprint in advertising and media, Thompson  is short on experience in those critical areas as Yahoo’s new CEO.

Ken Sena, an analyst from Evercore Partners, was recently interviewed by Emily Chang at Bloomberg West and questioned about Yahoo’s new decision to hire CEO Thompson.
“To his credit Scott Thompson brings strong technology and data capabilities where increasingly ads are bought through exchanges and through automated sources.  I think he will do well in the optimization process” Sena said.
Yahoo and Sundance Film Festival
According to a New York Times article, Yahoo Seeks To Freshen Its Brand at Sundance, beginning on Jan 19th Yahoo will be involved with activities at Sundance Film Festival and stream 12 shorts from the festival on its new redesigned video hub. If Yahoo wants to make a deeper push into streaming video and fend off encroaching tech giants like Facebook and Google, it will be important for Yahoo to have more cash available for acquisitions. Asset sales with Yahoo may be coming in the near future. Yahoo may look to sell their 40% stake in Alibaba and another Asian asset, Yahoo Japan, to shore up more capital to invest in new technology and media projects.





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