Photo: Yodel Anecdotal
Today’s events at Yahoo have the potential to be a major positive turning point for the company.First, Yahoo’s dysfunctional board actually moved relatively quickly to make a decision they had to make, which was to remove CEO Scott Thompson.
By waiting a week to offer any sort of explanation for the bogus degree on his bio–and then having his explanation immediately and angrily exposed as a lie by the headhunting firm he blamed for the mistake—there was no conceivable way Thompson could have remained as CEO.
By being allowed to resign instead of getting fired for cause, Thompson will probably walk away with a considerable amount of money. This will be galling to those who are now convinced that he fabricated the degree himself. But allowing the resignation was expedient for Yahoo, and it will reduce any legal exposure the company faces from filing erroneous statements with the SEC.
Second, five Yahoo board members resigned effective immediately.
The main problem at Yahoo over the past decade has been the Board of Directors, which has made one disastrous mistake after another. Individually, the board members are smart, capable people, but together, they have made (and avoided making) decisions that have helped run the company into the ground.
With such a large number of board members resigning, the new board will have few ties to the past.
Third, the new Yahoo board members—investor Dan Loeb, turnaround specialist Harry Wilson, and media consultant Michael Wolf—have expertise that Yahoo desperately needs. Just as important, they have no interest in preserving any status quo.Lastly, and also very importantly, with the appointment of Ross Levinsohn as CEO, Yahoo is now, finally, being run by an executive who knows the business that Yahoo is actually in: Digital Media.
For years, many people at Yahoo, along with the Yahoo board, have gazed with envy at the success of more technology-oriented companies like Google. Yahoo’s own vision, meanwhile, has drifted all over the map. Terry Semel’s regime was an old-media regime, and it took the company too far toward the old Hollywood and TV media model. Jerry Yang’s regime wanted to turn the clock back to the “start page” model of the mid-1990s, without acknowledging that the industry had long since moved on. Carol Bartz’s regime had no vision at all for where to take the company, at least not one that was visible to anyone inside or outside the company. The appointment of the unknown Scott Thompson as CEO, meanwhile, appeared to be an attempt to steer the company back toward technology.
But Yahoo isn’t in the “technology” business. It’s also not strictly in the “media” business–at least not the old-media business.
Yahoo’s in the digital media business.
And it is one of the most powerful digital media companies in the world, with a staggering 700 million users a month.
The digital media business is not as good a financial business as, say, Google’s search business, but it has other virtues–such as the ability to inform, entertain, and influence nearly a billion people around the world. That attribute has always been attractive and important to people in the media business. It’s why many of them work in the media business, instead of, say, the technology business or the investment-banking business, both of which often have bigger bottom lines.
Yahoo’s position in the digital media business, moreover, is an extraordinarily powerful one: It is both content creator and content distributor. And, like all good digital media companies, Yahoo is both a technology and a media company: Its product is a combination of both. Without great technology, you can’t deliver great content, create communities, and build platforms. Without great content, meanwhile, you can’t get anyone to use the great technology you build.
With Ross Levinsohn at the helm, Yahoo can finally stop trying to become something other than what it is. Instead, it can finally celebrate what it is, and press forward to become a much better digital media company.
The Scott Thompson episode is one of the most bizarre in corporate history. Importantly, however, it has now led to sweeping change in a board that seemed unable to function intelligently, and it has led to Yahoo now having the right kind of expertise at the top.
Scott Thompson’s fake resume, in other words, has finally brought change to Yahoo that it has needed desperately for years. If for nothing else, Yahoo shareholders can thank him for that.
DISCLOSURE: I work for Yahoo (as a host of Yahoo Finance). I am a Yahoo shareholder (since 1998—oof). I know tons of people at Yahoo and on Yahoo’s board. I know lots of Yahoo investors, many of whom I like personally. I like Ross Levinsohn, and I’m glad he’s CEO of the company. Yahoo and Business Insider have a syndication partnership, which I am thrilled about. I like a lot of other people in this drama personally and don’t like to do things that make them not like me. So, basically, I’m conflicted out the wazoo.
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