Another Year, Another Yahoo CEO Promising A Turnaround?
Scott Thompson is the latest CEO for Yahoo promising a splashy turnaround, and despite tech pundits rolling their eyes as if they have heard this all before, the earnings look upbeat for his first full quarter on the job.
Yahoo pulled in 23 cents a share on $1.07 billion in sales for the first quarter, the company said Tuesday. Earnings topped analyst estimates, while revenue, up a scant 1 percent from last year, came in as expected, reports Julianne Pepitone for CNN Money.
Thompson, seated in the big chair since only this past January, said Yahoo is “transitioning” about 50 properties that are struggling to attract users or revenue in a bid to streamline. “Yahoo has been doing way too much for too long,” he said. He didn’t specify which specific sites and units will be affected.
The company also will undergo a massive shuffling of its staff in an attempt to become a nimbler competitor. “Yahoo has built processes that were originally intended to help us scale, but they’ve become way too complex and have stifled innovation,” he said. “We simply must change that.”
These newest cuts come on top of its previous layoff of 2,000 jobs, nearly 14 percent of its workforce, writes Scott Martin for USA Today. Yahoo will instead focus on its consumer business group — a vast network of news, e-commerce and social sites, along with ramping up technology and sales groups.
The 17-year-old, Sunnyvale California-based company employed more than 14,000 employees at the end of 2011. “We had way too many people for the amount of output for this business,” Thompson said. “A streamlined Yahoo will help us get things done at the pace required.
The company has floundered in the online market and shrinking in importance with the rise of Google. Yahoo has also seen a steady stream of talent leaving the company that began during a failed bid by Microsoft to buy Yahoo four years ago for about $45 billion, reports Glenn Chapman for AFP.
Thompson’s goal is to do something that his recent predecessors, including Carol Bartz who was forced out in September, repeatedly failed at: articulating a vision of what Yahoo is.
“We’ve lost share of people’s time spent online in the recent years,” he said. “When I came on we specifically asked, what would it take to refine Yahoo’s focus? How would we build Yahoo from the ground up, if we were starting it today?”
Since January, Thompson has made several bold moves. In February, four longtime board members including chairman Roy Bostock announced they would not seek re-election.
Exactly one week after that announcement, activist shareholder Daniel Loeb and his hedge fund Third Point launched a proxy fight. Third Point, which owns a 5.56 percent stake in Yahoo, is proposing four new Yahoo board members, including Loeb himself.
In March, Yahoo filed a lawsuit against Facebook, alleging that the social network giant infringed on 10 of Yahoo’s patents related to advertising, privacy, customization, messaging and social networking.
Yahoo has lost its edge in nearly every field to newer rivals. The company gave up on search in 2009, and its losing ground in display advertising to new entrants to the market such as Google and Facebook.
So can Thompson put the fire under yahoo’s feet and move it into the future? It certainly seems that he has the motivation to do so. We shall see soon enough.