Yahoo's new CEO Thompson: Five big challenges

Yahoo's likely new CEO---PayPal president Scott Thompson---has a big to-do list including making the company relevant again.
Written by Larry Dignan, Contributor

Updated: 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?

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