Yahoo's new CEO Thompson: Five big challenges

Yahoo's new CEO Thompson: Five big challenges

Summary: Yahoo's likely new CEO---PayPal president Scott Thompson---has a big to-do list including making the company relevant again.

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Scott ThompsonUpdated: Yahoo has named a new CEO---PayPal president Scott Thompson---but challenges abound.

Yahoo has been searching for a CEO to replace Carol Bartz as well as pondering a sale.

Thompson's pedigree is good. After all, PayPal has been eBay's growth engine for years. In Yahoo's statement on the hiring, first reported by AllThingsD, Roy Bostock, Chairman of Yahoo's board of directors, said of Thompson:

His deep understanding of online businesses combined with his team building and operational capabilities will restore the energy, focus, and momentum necessary to grow the core business and deliver increased value for our shareholders. The search committee and the entire Board concluded that he is the right leader to return the core business to a path of robust growth and industry-leading innovation.

In return, Thompson said that Yahoo is an industry icon and has a solid foundation. Thompson, who starts today, said:

Speed is important but we will attack both the opportunity ahead and the competitive challenges with an appropriate balance of urgency and thoughtfulness. I cannot wait to get started.

The challenge at Yahoo, however, is going to be tricky and Thompson's predecessors said similar things about Yahoo. Thompson will have to make the company relevant, grow it and define what Yahoo is all about. The biggest challenge for Thompson may be defining Yahoo. The management conundrum: What does Yahoo really stand for?

But first Thompson needs to get the masses wound up about Yahoo---even if he only winds up being a caretaker before a sale of some sort. Here's a look at Thompson's challenges ahead:

  1. Relevance: Yahoo has a dominant audience on the Web yet is boring. In fact, Yahoo just seems to stumble along. Can Thompson change that perception?
  2. Technology innovation: For all of the knocks on Bartz, she did accomplish a few good things on the technology front by collapsing systems and integrating a companywide cloud and big data set-up. It's likely that Thompson could take those technology beginnings to new frontiers. What can Yahoo do as a leapfrog as it straddles this media/technology company line?
  3. Definition: We've heard it forever---Yahoo is a media company. However, Yahoo is like many Internet media companies in that it needs technology to deliver its wares. Thompson needs to define Yahoo in a way where it can be cutting edge.
  4. Content: Yahoo has turned to content in a big way in an effort to battle AOL more. Will Thompson keep that focus or is there another waffle move on deck when it comes to producing content?
  5. Morale: Thompson is a real geek. Is that enough to rev up the Yahoo troops. Yahoo employees have been through a lot. They've had media execs as CEOs, geeks and odd ducks dropping F-bombs everywhere. Another item to ponder: Is Thompson just a caretaker for a bigger deal?

Topics: Browser, CXO, Social Enterprise

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8 comments
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  • long road to go

    I used to use Yahoo for pretty much everything including two Yahoo Plus email accounts and my Yahoo as my home page. I don't use any of it now. It started with spam. How many years did it take before they considered all variations of Vi@GR@ to be spam? Then page after page of page to get somewhere. Then the search engine change.
    It will need to have some pretty amazing changes before I consider it again.
    oneleft
    • I feel Thompson is just a caretaker for Microsoft; who owns Pay-Pal.

      @oneleft ><br><br>"Nothing's wrong with Yahoo! I use it all the time. But since I use Google search for everything search related I have this Q4' 2011 gone full-on Google Chrome and have always had MSN.com as my homepage with Yahoo.com easily and quickly accessible. Now I even do follow up news headlines with Google."<br><br>" Most all of my interest online are for shopping local stores or buying electronics. I read many daily news topics and enjoy keeping up on the latest technology trends on ZDNet and CNet. This keeps me grounded to using either Google (default) or Bing as my secondary IE9 browser. I have serious issues with IE9 and Firefox 8.0.1 using a jmf-616 ARM based 128MB DDR2 cache, 128Gb SSD. My next SSD will be a Intel 510 with the same 38nm nand storage technology for reliability; It's sad to see the jmf-616 never had a chance. Its potential in the consumer market with Windows 8 at 14 months away has already expired."
      Zurk_Orkin
  • What type of media company would Yahoo become?

    I'm married to Google. Have an Android phone, Nook Color running CyanogenMod, GMail & Calendar, my default search.... Not that Google is the best out there, but they gave me reason to put my eggs in their basket. <br><br>Yahoo needs to come up with something different. If they're a media company, where's the content other than reprints of Associated Press? Not to mention, media is not the same as it was in the '90s or even early 2000s. Could they challenge Netflix and Crackle and do like Google, use the search to drive business to their Netflix-type media? I don't know. Just throwing stuff out there. I know you guys will rip it apart on the first sight of error. Like sharks to blood :-)
    tallbruva
  • @tallbruva

    Totally agree with you. Dang - where are the sharks? :-)
    bedswerver
  • search opportunity

    I still use Yahoo for my home page, but immediately jump over to google for any searches. Given the amount of junk I get in my google search results these days, I see search as a real opportunity for Yahoo. I think the key is to implement a tighter integration of user feedback of the results. Let users rate the results, even without visiting the page. How do you counter a room full of people in India paid to bias the results? Give a diferent weight to older accounts, accounts which rarely supply feedback, etc. So the job is as much about rating the customer as it is the search results. Finally, they should have their own room full of people rating the search results on the most common searches. Given how bad the current results are, clearly too much reliance on an algorithm over human common sense.<br><br>gary
    gdstark13
  • Straightforward Things to Do

    Mail:

    Advertise the fact that Yahoo! Mail supports IMAP very nicely while getting an ActiveSync license up and running ASAP for calendar and contacts (and email). Advertise that it supports [i]unlimited[/i] email. I have >15 gigs of work email in addition to my Yahoo! mail (dating back to 1995) and I can store [i]all[/i] of it in my Yahoo! account.

    Yahoo! Mail's Web client is already the fastest and most attractive of the "big three", but the back-end stuff needs work, especially SPAM detection which was industry leading...5 years ago.


    News:

    Stop mucking with it. It is the best news portal on the Web for simply reading the news, bar none, but they keep changing the layout, etc., and when they do, simple things start breaking regularly -- like emailing an article. Make sure the [i]features[/i] work before working on flashiness. Also, do something about the quality of the comments, which are downright distressingly racist, homophobic, [i]etc[/i].


    Search:

    Start treating search like a first class citizen. Bing-powered results are usually superior to Google's unless one is looking up scholarly information. Can Yahoo! value-add on this front?


    Social:

    How about hosting a Diaspora node and working hard to influence the project's development? Diaspora is in Alpha now, but I suspect it will land like a bomb when it is finally released. Be in on the ground floor. And earn some goodwill.
    x I'm tc
  • Two things could lure me back...

    I agree with @gdstark13 that G's search is slowly going down the crapper. I realize, of course, G is not a pro bono enterprise, so I know that in order to make money they have to diddle their search to satisfy their customers (the advertisers) that they're getting the best bang for the buck from their merchandise (the users).

    Y! could make creep in with a decent search and win the day, or at least a chunk.

    Other thing is, Y! could open up its free email. Do as G does: free forwarding and free Pop/iMap access. And their mobile GUI right now really sux: ever look at Y! mail on an iPad? Needs work.
    fjpoblam
  • Smart phone attack

    They should push their apps more and make yahoo more integrated into everyday life, their new yahoo app is phenomenal. Many 25-35 YO would benefit it most.
    gilzmo