Yahoo Cans Scott Thompson

by Jordan Richardson on May 14, 2012

As our own resolute expert Matt Klassen reported on May 8, Yahoo sprawled headlong into a sticky situation when it was revealed that CEO Scott Thompson “doctored” his resume. It turned out that he claimed an undergraduate degree that he didn’t actually have.

Fast-forward a few days later and it looks like Thompson has been shown the door by Yahoo in an effort to do damage control. The trouble with Thompson is, plainly, that he made a big mess for the distressed company.

Charged with changing Yahoo’s fortunes, Thompson, the company’s fourth CEO in less than five years, demonstrated an incredible lack of judgement and fundamentally had to go. Yahoo had no choice, especially with a swarm of heated shareholders at their heels.

Yahoo did not give a reason for Thompson’s departure, but, with inaccuracies sitting impertinently on Thompson’s biography page on the company website and with the Securities and Exchange Commission, it’s not hard to determine the cause for this speedy dismissal.

For the record, Thompson’s biography featured two degrees from Stonehill College, a school located near Boston. It was claimed that he held a degree in computer science and a degree in accounting. “Activist hedge fund manager” Daniel Loeb was the shareholder who found out that Thompson did not hold the degree in computer science. Loeb, who now sits on Yahoo’s board, dropped the bomb on May 3 via a letter.

Thompson “apologized for the error” on May 7, insisting to anyone who would listen that he had no plans to resign. He didn’t explain how the “error” occurred. Loeb, meanwhile, pressed Yahoo’s board for internal documents pertaining to the research the company did on the new CEO. On May 10, Thompson insisted that he didn’t supply the deceptive information. Three days later, he was fired.

As Matt documented, the company initially stood by their man and even had the gall to call the deception an “inadvertent error.” Employees, shareholders and the general public raised all sorts of criticism over Yahoo’s non-handling of the situation, so there really was only one move to make.

Ross Levinsohn will step in as the interim CEO. The head of Yahoo’s content and advertising avenue will become the fourth person to run the company in just eight months.

In an interesting adjunct to this story, Yahoo director Patti Hart was apparently documented as holding a degree in economics and marketing in a company regulatory finding. As the Thompson trickery came into play, Yahoo admitted that Hart actually didn’t hold the degree they said she had. Instead, she holds a bachelor’s in business administration from Illinois State – with specialties in marketing and economics, but no degree. Hart, says Yahoo, will step down at the still-unscheduled annual shareholder’s meeting.

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