Yahoo's revolving door of CEOs: What happens next?

Yahoo's revolving door of CEOs: What happens next?

Summary: Yahoo is in a panic. Its revolving CEO door spins yet again as Scott Thompson leaves the company. Interim CEO Ross Levinsohn has challenges ahead. Here are some of them.

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Out with the old, in with the new.

Yahoo's revolving door of chief executive officers continues to spin as Scott Thompson leaves the company on the heels of 'Resumegate', and is immediately replaced by interim chief Ross Levinsohn.

Thompson has left without word or comment, unlike the fireball blaze many had expected and some had hoped. Allegations were made by activist investor Dan Loeb claiming the chief executive did not attain the college qualifications he claimed; details eventually landed in U.S. SEC filings.

Loeb has secured seats on Yahoo's board for himself and two other members of Third Point, a hedge fund he founded.

Yahoo, damaged by a decline in profits and another slip away from its glory days, once again suffered at the hands of the company's head. Thompson was only four months in the role since Carol Bartz's infamous firing by phone.

Subsequent reports from the Wall Street Journal say  Thompson has been diagnosed with thyroid cancer. The report noted only that Thompson's decision to leave the company "was in part influenced by [his] cancer diagnosis."

Levinsohn comes with rave reviews. But he has a fight on his hands. The company may have settled down since the holes in the side were patched up, but the ship is still sinking. What happens next may make or break the company.

Yahoo 6.0: We think, it's hard to keep track

Levinsohn is Yahoo's sixth chief executive in five years, in a post that has seen more people step in and pushed out than pretty much any other U.S. publicly trading company.

In a note to Yahoo employees, leaked to AllThingsD, the interim CEO said: "Today’s announcements lay to rest the unfortunate and serious distractions surrounding our senior leadership and the composition of our Board going forward".

Yahoo has a management problem --- or at least, it had one. Loeb may not be the saving grace for the company but his move to oust Thompson may have been the shuffle the board needed. Roy Bostock may have won a round of applause in sacking Bartz, but he oversaw the hiring committee that saw the doomed Thompson rise to the ranks.

Patti Hart, the Yahoo director who led the hunt for Thompson, and was blasted for in hindsight not doing a better job of it, resigned with three others.

Yahoo's board is vastly different from this time on Sunday when the board announced the reshuffle.

Next stop, the C-level executives: Thompson could've been Yahoo's saviour

Levinsohn in his first note to his employees noted his wish to "stabilize the leadership team." The board has all but fixed itself. The focus is now on the second tier down: the company leadership, vice-presidents and C-level executives.

After the Bartz fiasco, Thompson was seen as the man of the hour. He could save Yahoo. He had a plan and was determined to stick with it. The company's shares rose in response and the markets reacted favourably towards the long-term plan.

But then he royally stuffed it up and dragged half the board down with him. Yahoo's reputation is once again tarnished and its remaining C-level executives are fixing the paddles to the company's chest as the board ramps up the voltage and forcibly shouts "clear!"

The new albeit interim CEO may have to shake up the troops. Yahoo is still a mess and sees no sign in recovery. Yahoo needs a further rattle in order to get the best of the best in to push through Thompson's vision. Notwithstanding his indiscretions, his plan was perfectly viable.

Whether or not Levinsohn will stick to it remains to be seen.

Thompson's five things, or his things?

The chances are Levinsohn will continue on as the company chief and transition to full status, dropping the "interim" in the coming months once he proves he can handle the reigns.

Thompson had an arduous and difficult job to get his new company back on its feet. Getting Yahoo relevant again was a prime focus and defining what Yahoo would strive to achieve in its then-coming months would shape its future. But generating morale was short lived amid 'Resumegate'. Thompson failed because his tenure was so short-lived he did not have the chance to accomplish half the things he wanted to do.

But the new Yahoo boss faces a dilemma: crack on with Thompson's to-do list, or shape the company's future to how he sees fit?

Levinsohn was the global media chief who oversaw the company's advertising strategy. He remains "core" to Yahoo's business strategy and "core business" was Thompson's main focus.

Levinsohn has a B.A. in Broadcast Communications --- a far cry away from a computer science degree --- but his amassed experience suggests he is more in touch with Yahoo's core business than Thompson ever was. His resume is impressive and shows a keen commitment to interactive services and has proved to bump the financials with good old-fashioned hard work.

He therefore surely knows the best path to take. But "change" is afoot.

He said in his note to Yahoo employees that "change --- sometimes unexpected and sometimes at lightning speed --- is something we will continue to live with and something we should embrace," signalling a complete breakaway from Thompson's leadership.

He can decide to take on the burning reigns from Thompson or shape new ones based on his own prior experience. The coming days will be crucial for Levinsohn to steer the runaway train back on course.

Patent wars: Thompson started it, so 'unstart' it.

Thompson's "five things" also left one issue off the books: an all-out ground assault on Facebook. Yahoo fired its patent cannon at Facebook over 10 patents, then Facebook countersued. Yahoo retaliated by adding two more patents to its list.

It was an unexpected attack and likely one born out of an existing patent war, highly spurred on by the Apple vs. Samsung saga. In fact, it's not Apple vs. Samsung per se, it's Apple declaring "thermonuclear war" against Android, using Samsung as Android's main runner in the smartphone market as the punching bag.

Steve Jobs died and left Apple with Tim Cook. The patent war continued but widely stagnated. With a new leader at the helm, settlement talks are on, even if they are court-ordered and compulsory. In a similar case, Apple may be pushing for a separate settlement in the 'iPad' trademark dispute with Proview --- signalling a post-Jobs change in litigation direction.

A similar tactic may shape how Yahoo takes on Facebook. A new leader: a new direction. Yahoo could drop the suit altogether and there will be no wounds to lick. It could be brushed off as a 'rogue' action from a former company leader who left the company in a haze of controversy.

Image credit: Yahoo via CNET; modified from source.

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