Yahoo's CEO steps down amid 'Resumegate'; Board reshuffles

Summary:After a turbulent fortnight for the once darling of the Web, its chief executive is set to step down after allegations over resumé fixing proved too damaging for the company.

Yahoo's chief executive Scott Thompson has stepped down and "left the company", the board of directors said in a statement, in what may have drawn a line under the college education controversy.

The news was first reported by AllThingsD, and confirmed by the company a short while later.

Whether Thompson left on his own accord or was pushed remains unclear.

Update (12:50 PDT): A company statement has confirmed Ross Levinsohn, Yahoo's global media chief, is the new interim chief executive.

Newly-added director Fred Amoroso is now chairman of the board, replacing Roy Bostock, who upon Thompson's appointment said he was "precisely the formula we need at Yahoo!".

Third Point nominees --- Harry Wilson, Michael Wolf, and founder Dan Loeb --- will join the board on May 16 as a result of the settlement agreement.

The four Yahoo directors --- Patti Hart, V. J. Joshi, Arthur Kern, and Gary Wilson --- who were set to leave the board at the company's annual meeting later this year, will resign immediately.

The board announced the move following a meeting this morning.

A Yahoo spokesperson remained unavailable for comment at the time of initial publication and updates.

The former PayPal president was hired in January to fill the void left from the sudden departure of Carol Bartz, who was famously fired by phone. At least on the bright side Thompson wasn't extended the same courtesy.

Only a few months in to his new appointment, he promised a "smaller, nimbler, more profitable" company, while at the same time serving pink slips to 2,000 employees. Thompson justified the move by claiming the company would save around $375 million per year.

Yahoo's first quarter under his leadership scraped a low bar, generating $1.077 billion in revenue minus traffic acquisition costs, managing only a 1 percent increase on the first quarter of 2011.

During the earnings call, he said the company would scrap 50 'non-core' products from Yahoo's portfolio, leaving only Yahoo News, Finance, Sports, Entertainment --- and crucially, Yahoo Mail --- in the clear.

But friction emerged between Loeb and Thompson soon after his hiring.

Dan Loeb, founder of Third Point, which has a 5.8 percent stake in Yahoo, wanted more seats on Yahoo's board. Yahoo refused, and Loeb fired back with allegations that Thompson had not been awarded a computer science degree at Stonehill College as was claimed on his Yahoo biography. The erroneous biography was made only more suspicious after it was ported from eBay pages while he was at the company.

Despite the matter only being a minor detail to his record, he had ample opportunity to correct the mistakes --- even when interviewed in person --- but failed to do so. Yahoo pulled the biography from its website within hours of Loeb's allegations, but it didn't escape SEC filings, in which the biography was ported to the filing without a moment's thought.

Yahoo effectively misled the U.S. government in an official report.

The company will now start the process of finding yet another chief executive to fill the void left behind by Thompson.

Related:

Topics: Legal, Collaboration, CXO, Enterprise Software, Social Enterprise

About

Zack Whittaker writes for ZDNet, CNET, and CBS News. He is based in New York City.

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