The new Yahoo! (NASDAQ: YHOO) board is different from the one that turned down a rich buyout offer from Microsoft (NASDAQ: MSFT), different from the one that hired Carol Bartz as CEO, and different from the one that made Scott Thompson chief executive without a complete check of his background. But the latest board seems prone to similar mistakes. It could have settled the question of who is in charge at its annual meeting by naming interim-CEO Ross Levinsohn as permanent CEO.
The decision to elevate Levinsohn should be an easy one. Based on press reports, all of the other viable candidates for the job have dropped out, apparently some of their own accord. The job could end a bright career of an outsider because Yahoo! has come to be seen by many as a company that cannot be turned around. It has been flanked by powerhouses Google (NASDAQ: GOOG) in search and search-based advertising and by Facebook (NASDAQ: FB) in the display ad sector.
Levinsohn is enthusiastic about the job. He stayed on when he was passed over for Thompson. He has made it public knowledge that he would like to run the company long-term. He has made optimistic comments about Yahoo!’s future prospects to the press and employees.
The new Yahoo! board only has a few important decisions to make. One is the fate of the company’s investments in China e-commerce company Alibaba and its ownership of Yahoo! Japan. Another is to appoint a permanent chief executive so that shareholders, employees and clients know who will run the company, and what that person’s plans will be to get Yahoo! back on a track to growth. Levinsohn cannot announce any concrete, long-term plans because he is not the CEO. The new Yahoo! board has made a bad mistake, just like several of its predecessors did.
Douglas A. McIntyre