Yahoo's new CEO Thompson: 5 challenges

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

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.

However, 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.

Here's a look at Thompson's challenges ahead:

1. Relevance: Yahoo has a dominant audience on the web and yet it's 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 company-wide 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?

One way for Thompson to move the company ahead might be to use one of Yahoo's assets — data.

As noted in my 2012 predictions, my working theory is that all companies are increasingly going to look like retailers. They will harness analytics, customer data and predictions to better serve the customer. Retailers have been using analytics for years to do everything from figuring out where to place stores to determine weather patterns and how they affect consumer spending.

Enter Yahoo. Yahoo has been a leader in using Hadoop. The company serves up personalised home pages, targets customers and does it on the fly with real-time analysis. In the end, data is Yahoo's biggest asset. If Thompson can harness that information, Yahoo has a shot at generating real shareholder value without financial engineering such as going private, breaking up or selling out.

With that backdrop, Thompson's view on data is worth noting. Thompson was asked about how Yahoo is going to compete with exchanges, Facebook and Google in display advertising, as well as personalisation. Here's what he said:

It is just too early for me to have any informed opinion as it relates to the display space and what is happening there and what is going to be happening next. The one thing I would say to you, and I think this is very important for this business and a number of others, is that the data that these internet businesses create and the analytical ability to understand what that data tells you, and the ability to use technology and analytics to drive a better outcome for your customers is in almost every business I'm familiar with, today, online and offline is becoming more and more critical. And I only get a glimpse at this point of how much data all of these wonderful businesses that Yahoo has. I feel certain that that wealth of data is going to be exploitable for next-generation products, next-generation experiences and for super-competitive capabilities in the display space in other space databases that are in marketing and advertising. So, a lot to learn, still very early, but my instinct says we're going to be able to find ways to compete and innovate that the world hasn't seen yet.

In my view that quote may indicate that Thompson is the right guy.

Via ZDNet US