Internet giant Yahoo lost its fourth CEO in five years—and its second in less than 12 months—Sunday after Scott Thompson, under fire for a fudged resume, left the company.
From the Globe:
Early this month, New York-based hedge fund investment firm Third Point LLC, which owns almost 6 per cent of Yahoo, alleged Mr. Thompson had falsely claimed he earned a computer science degree from Stonehill College. In fact, the former eBay executive earned an accounting degree from the school. Mr. Thompson has claimed he did not file the erroneous information, which had nonetheless made its way into regulatory filings. Third Point has long criticized Yahoo’s board and the company’s largely futile efforts to return to growth.
Had Yahoo’s management shown any signs of turning the company around, they may have been able to withstand Third Point’s criticism. But the company has largely been unable to make much money off its popular websites, especially in the face of stiff competition from Google and Facebook in the online ad market. Once valued at more than $100 (U.S.) at the height of the tech boom 12 years ago, Yahoo shares have hovered between $12 and $18 for almost four years, with no signs of a turnaround.
These days, getting hired as a Yahoo CEO is a bit like getting a gig as the drummer for Spinal Tap, wrote Nicholas Thompson in the New Yorker. Carol Bartz, Scott Thompson’s predecessor, lasted just three years in the post. But whether a new body can really turn the flagging company around is an open question. Online, it’s a thin line between behemoth and afterthought. And while Yahoo was one a giant, so too was Geocities. And look what happened there.
In 1998, at the height of the dot-com bubble, GeoCities went public, becoming a billion-dollar company in a matter of hours. The following year, Yahoo paid an incredible US$4.6 billion in stock for it; news of the sale made the Wall Street Journal’s front page. “I thought Yahoo was a good home for GeoCities,” (founder Dave) Bohnett says. “They had the resources to take advantage of the brand.” Indeed, with roughly 3.5 million Web pages hosted there in the late 1990s, GeoCities was a traffic magnet. But despite the crowds who flocked to it, monetizing the site was another question.
In 2009, Yahoo shut Geocities down. Today the name is like a joke from another Internet era. One wonders whether Yahoo itself is destined for a similar fate.