Yahoo's new CEO brings affable nature to turnaround job

When Yahoo Inc. board members started their search last year for a new chief executive, they were expected to tap an executive with online media experience to help the struggling Internet company compete against Google Inc. and Facebook Inc.

On Wednesday, Yahoo surprised industry watchers by hiring Scott Thompson, an affable online payments guru who had eBay Inc.'s PayPal unit on track to become the biggest money maker at the Internet commerce giant.

Thompson will need to use his New England charm and management acumen to reignite excitement in Yahoo, a once-great brand that retains a large audience but has struggled to remain relevant on the Web.

Thompson, though, confessed on a conference call with Wall Street analysts that he had no informed opinion on the online display-advertising market, where Yahoo has sought to retain a leading position. He later argued in an interview that his relative inexperience could be an advantage because he'll be able to "ask new, refreshing questions.

"I don't perceive it as a weakness at all," he said.Investors, though, remain unconvinced, and Yahoo shares fell 3.1% Wednesday, to $15.78.

Thompson's hiring comes at a significant time for the company as it reviews its strategic direction and deals with the fallout from its previous CEO, Carol Bartz, who also came to Yahoo without much online-advertising experience.

Thompson built his reputation as an executive at Inovant, a technology arm of Visa Inc. He left for PayPal in 2005, and was tapped to become president of the payments unit about three years later.

While at PayPal, Thompson has overseen a fast-growing business that outpaced eBay's core marketplaces unit. In October, eBay reported that marketplaces revenue rose 17% in the third quarter; PayPal revenue rose 32% during the period.

In a reflection of Thompson's importance to PayPal, shares of eBay recently fell 3.8%, to $30.16.
Maureen Breakiron-Evans, who worked with Thompson for three years at Inovant before he left for PayPal, recalls him as an approachable manager who was also "a very dynamic individual, and a strong strategic thinker."

Taking the helm at Yahoo should be difficult, Breakiron-Evans said, though Thompson is "the kind of guy who relishes a challenge."

Despite Thompson's success at PayPal, his appointment at Yahoo surprised some observers. Ben Schachter, an analyst with Macquarie Securities, said Yahoo's opting for an executive with no experience in the company's core business of display advertising is a bit puzzling following the failure of Bartz, who came to Yahoo in 2009 from design software developer Autodesk Inc.

"Given what happened with Carol Bartz, I think this is very surprising," Schachter said.Key differences, though, exist between Bartz and Thompson. Bartz made her way to Yahoo after a long career in Silicon Valley, stretching back to the early days of Sun Microsystems.

Thompson arrives following a string of technology-related jobs in the payments and financial world. Bartz was a sharp-tongued, sometimes awkwardly confrontational executive from the Midwest; meanwhile, Thompson can disarm those he meets with his friendly manner and accent.

A native of an area south of Boston, Thompson retains a distinct Boston accent and has an enduring affection for the Red Sox, Patriots and Bruins sports teams. He can come off more as a person to watch a ballgame with rather than a Silicon Valley insider, though he is a longtime San Francisco Bay Area resident.

Thompson, however, faces at least two deep-pocketed, aggressive rivals in the display-advertising business. While Google has long relied on search advertising to support its business, it has more recently delved deeply into the display-advertising market where Yahoo has been a leader.

Facebook, meanwhile, has made its own significant inroads in the display-advertising business as the social-networking site pushes well past 800 million users.

To describe his vision for Yahoo's content and advertising offerings, Thompson used a sports analogy."We're going to skate to where the puck's going to be with these businesses," said the father of three grown children.

As a Silicon Valley executive, Thompson said he has crossed paths in the past with Yahoo co-founder Jerry Yang and some Yahoo board members. But the current Yahoo executive team is unfamiliar to him, he acknowledged.