Tuesday, 8 May 2012

Fibs And Foibles: Yahoo's CEO Woes

We've all done it; stretched the truth a bit on our CVs to impress a prospective employer. The trick is to not be too obvious about it or you could be found out. If you're in a high-profile job and your fib was particularly egregious, you're stuffed, as Yahoo CEO Scott Thompson discovered. Pressure is mounting on the internet giant to oust him, but will it be enough to remove him, and what will happen after that?

What happened?

You have to see this in context:

Daniel S. Loeb, the founder of the hedge fund Third Point, wants to take over as CEO of Yahoo, and has made available online his plan for the company. On Thursday May 3rd, he sent a letter to the board in which he asserted that Yahoo’s chief executive, Scott Thompson, had added a degree in computer science to his résumé that he couldn't possibly have earned because

Stonehill College... did not begin awarding computer science degrees until 1983 — four years after Mr. Thompson graduated.  We inquired whether Mr. Thompson had taken a large number of computer science courses, perhaps allowing him to justify to himself that he had "earned" such a degree.  Instead, we learned that during Mr. Thompson's tenure at Stonehill only one such course was even offered – Intro to Computer Science

Oh, dear. And there's more: he's also accused another board member, Patti S. Hart, of having “received a degree in neither marketing nor economics," but offered no proof to back up that statement as with Mr. Thompson.

What will happen next?

At his first earnings call last month, Scott Thompson talked about reducing Yahoo's size and becoming more focused on its core business. He remarked that Yahoo! would be "doing away with everything that does not contribute to its core business of profit-driving ads and e-commerce."

Thompson also wants to find new revenue by aggressively licensing Yahoo's intellectual property, a plan he put into place in March by suing Facebook for alleged patent violations. Patents aren't mentioned at all on Loeb's website. - ReadWriteWeb

Patent-trolling Facebook appears to be an attempt at opening another income stream but it appears to be failing so far because Facebook has a stronger case.

Meanwhile, Mr. Loeb's plan is to

        Focus Yahoo!’s investments in the highest priority areas and simplify the organization: Determine which platform investments are strategic and essential to Yahoo!’s future, then reposition investment around growth initiatives and product innovation.

    Re-commit to a Yahoo! open to innovation, both internally and externally: Yahoo!’s resources, reach and insight into user interests should be aggressively leveraged by internal and external developers who are passionate about delivering rewarding user experiences.

    Attract the best media, advertising and technology talent who can create innovative experiences and implement these initiatives. This will involve a deep commitment to fundamental change in the way Yahoo! is managed and its historical approach to innovation.  

So it seems he's not a carpetbagger out to strip its assets and sell them off to the highest bidder. He's also interested in Alibaba, a Chinese ecommerce company owned by Yahoo that connects Chinese manufacturers to companies around the world looking for suppliers.

Mr. Thompson has apologised, saying

We have all been working very hard to move the company forward, and this has had the opposite effect.  For that, I take full responsibility, and I want to apologize to you. - Wall Street Journal

It remains to be seen whether or not Yahoo will replace their CEO, but since Mr. Thompson has neither confirmed nor denied adding the fake degree to his CV, it seems likely that they will. The question now is, who will they replace him with and will the patent trolling continue?

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