Yahoo CEO Quits Amid Resume Scandal: Is This the End of Yahoo?
Yahoo can't seem to catch a break. The once-upon-a-time powerhouse Sunnyvale-based company has fallen short the past few years, trailing far behind Google and Facebook in innovation and the battle for advertising dollars.
Now, the company has been hit again with another scandal: Scott Thompson, its CEO, misrepresented his educational background and was questioned by Yahoo's shareholder, Daniel Loeb. This comes at a time when the company has become very vulnerable, following its patent war with Facebook. Between the patent lawsuit and losing their CEO, can Yahoo stay afloat or will it eventually fall by the wayside?
Yahoo was once a solid company founded in the heart of the Valley. It was a small but distinguished web-based platform that provided real time news, a search engine and e-mail service to users from around the world. Since its founding in 1995, however, Yahoo has been the ugly step sister in Silicon Valley by picking on younger companies.
The patent lawsuit it started with Facebook, just as the company was settling in on its IPO, has been lauded as childish. The company has failed to keep up with its Valley counterparts and instead of fixing the underlying problem (lack of direction and complete failure to adopt a new and modern strategy) Yahoo is taking a shortcut by trying to cut down its competitors by starting a patent war.
This is something, I'm told, is blasphemy in the Valley: a low-blow in a community that prides itself on being homely and lax. The patents in question were basic codes that everyone has access to, including Wikipedia, YouTube, Twitter, and Zynga. However, the lawsuit is going only after Facebook.
In recent weeks, the company has lost its CEO amid lies on his resume. Scott Thompson, former CEO of Paypal, resigned last week because of a misrepresentation on his resume for a degree in Computer Science he never received. Daniel Loeb, who questioned Thompson's credentials, was a disgruntled shareholder who was unhappy with the company's direction that has lost ground to Facebook and Google in the past years.
Thompson was brought on as CEO only five months ago to lead an enormous overhaul of the company, but instead he embarrassed the company to even a further extent. Even worse, Thompson's lie was not even possible, the college he attended did not offer a Computer Science degree until 4 years after he graduated. Thompson did issue an apology to all Yahoo employees after the news broke. After this was made public, shares of Yahoo dropped 25 cents.
Before Thompson resigned last week, he told the board of directors and investors that he was diagnosed with Thyroid cancer. Yahoo has not released an official response to the news just yet. Thompson was replaced by Ross Levinsohn on an interim basis, formerly Yahoo's executive vice president of the Americas region.
Between the lawsuit and a precarious hierarchy, Yahoo does not seem to be ready for any perpetual growth in its near future. In a Valley where companies are founded and sold quickly, it is only a matter of time before a direct competitor can perfect what Yahoo has started.