Wall Street unenthused over Yahoo CEO hiring

Yahoo taps PayPal President Scott Thompson to replace Carol Bartz

Yahoo's naming Wednesday of PayPal President Scott Thompson as its new chief executive isn't exactly impressing Wall Street.

Shares of Yahoo (NASDAQ: YHOO) fell to as low as 15.96, or 2% below Tuesday's closing price of 16.29, in early trading Wednesday.

Yahoo has been without a chief executive since last September 6, when the board of directors fired Carol Bartz after less than three years on the job. Shareholders eventually pressured the board to take action after more than two years of stagnant revenue and share price.

That it took nearly four months to replace Bartz says any number of possible things, none of them good for Yahoo: 1) The board was unprepared to replace Bartz, which would indicate it was a rushed decision; 2) Yahoo was unable to attract top candidates (a problem that reportedly plagued HP before it settled on Leo Apotheker in 2010); 3) The future of the company was so in doubt that the board deferred a CEO search while it sought a buyer.

I suspect all three are true, so don't expect Thompson -- who has no CEO experience -- to perform miracles. He's dealing with a dysfunctional board and a directionless company.

A company, it should be noted, that has valuable assets: primarily, its page views, which trail only Facebook's and Google's. Unfortunately, what Yahoo doesn't have is a defined role for the future. It can't be what it was -- a pioneering Internet portal. Those days are over. It can't be Facebook. Facebook already is Facebook. It can't be Google. It's tried, and failed. What's left in the evolving Internet ecosystem?

Yahoo needs an epiphany, a big vision. But can Thompson -- a "technology and payments guy," as one analyst put it in a MarketWatch article -- provide that, or even the environment for it? I'm skeptical, and so, apparently, is Wall Street.

Interestingly, shares of eBay (NASDAQ: EBAY) -- the parent company of PayPal -- were down as low as 29.55, or 5.7%, on Wednesday, so clearly investors think Thompson's departure will have a negative impact on the online auction giant's bottom line. (Understandable, since if there's a perfect place for a "technology and payments guy," it's PayPal.)

Thompson takes over at Yahoo starting Monday. Interim CEO Tim Morse, who temporarily replaced Bartz, will return to his job as CFO.

The thing is, if Yahoo had waited until February, it could have hired this guy. He knows a little something about vision.

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