Monday, 14 May 2012 12:28

The cause of Thompson's downfall at Yahoo!

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Scott Thompson is attempting to portray his Yahoo! bio 'error' as a sin of omission, rather than commission.  It seems few believe him.  Falling on his sword over the weekend suggests he didn't believe it himself, either.

Following Dan Loeb's relentless campaign against Scott Thompson in the matter of a tiny little fib in his bio (he never did have a Computer Science degree), another major investor has join in with the shouting.  According to Owen Thomas, Capital Research and Management which has two funds owning around 10% of Yahoo! Shares has joined with Daniel Loeb's Third Point fund's 5% in insisting Scott Thompson resign.

In defending his bio error, Scott Thompson has attempted to lay the blame on a junior employee at executive placement company Heidrick & Struggles who supposedly mis-heard Thompson's claim of not having a Computer Science degree and used that incorrect information to build his standard bio.

Subsequent to that, PayPal placed the bio on it's web site and it was also used as a reference for any conferences etc that Thompson spoke at.  Furthermore, when seeking to join Yahoo!, Thompson provided no resume and it would seem the  recruitment team at Yahoo! Relied on a simple web search to uncover the same document.

Of course the problem is that the bio of a CEO becomes a legal document when it is placed on file at the Securities Exchange Commission.

Thompson has admitted to never checking the document when it was used at countless conferences and as his reference for being appointed to various company boards of directors.

Over the weekend, Thompson did the honourable thing and resigned after just four months in the role, as iTWire reported earlier today.

But that is by no means the end of this rather sordid saga.


Current content and advertising services leader, Ross Levinsohn, will take over as interim CEO, becoming the fourth CEO in just eight months according to a release by the company.

Current Yahoo! Chairman Roy Bostock and four other directors who were scheduled to step down at the company's annual meeting (anticipated to be in June) will depart immediately. Three of these vacancies will be filled by Daniel Loeb and two of his allies, former MTV Networks executive Michael Wolf and turnaround specialist Harry Wilson.

The four departing directors include Patti Hart, widely regarded as the director responsible for the recruitment error.  In addition to being the leader of the recruitment team which selected Thompson, Hart also has resume issues of her own when Loeb uncovered a similar error in her qualifications.

It also appears that the new board is looking at ways to ignore Thompson's resignation and to sack him instead on the basis that he lied to them (at least implicitly) to gain the role.  This would save the company millions in termination fees to be paid to Thompson.

So, with a significant change in the board and the departure of its CEO, it is now very unclear what will become of the plans in place to restructure Yahoo!.

Does this mean that many of the 2000 employees will be "un-fired?"  What of the restructuring plans already in train?  We await Levinsohn's early moves with great interest.


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David Heath

David Heath has had a long and varied career in the IT industry having worked as a Pre-sales Network Engineer (remember Novell NetWare?), General Manager of IT&T for the TV Shopping Network, as a Technical manager in the Biometrics industry, and as a Technical Trainer and Instructional Designer in the industrial control sector. In all aspects, security has been a driving focus. Throughout his career, David has sought to inform and educate people and has done that through his writings and in more formal educational environments.

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