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Yahoo Selects New CEO

MELISSA BLOCK, HOST:

A once proud and now stumbling Internet giant has a new CEO. Scott Thompson is the man picked to run Yahoo. He is currently the president of eBay's PayPal unit.

As NPR's Wendy Kaufman reports, his task at Yahoo is daunting.

WENDY KAUFMAN, BYLINE: Yahoo boasts more than 700 million users. One of them is the new CEO, Scott Thompson. He spoke on an early conference call today.

SCOTT THOMPSON: Yahoo is one of the great, iconic brands of the Internet. And with a solid base of advertisers, it presents both a huge opportunity and a great challenge.

KAUFMAN: Challenge may be the operative word. The Internet pioneer has been struggling for years, overtaken by the likes of Google and Facebook. While it may have a solid base of advertisers, its ad revenues are falling. Leadership and direction have been in short supply. Top engineers have been leaving in droves, and morale is low.

The company's way forward is far from certain, but Thompson says Yahoo's core business assets are stronger than people think. He cited a huge number of users, what he called world-class technology, and access to reams of data - along with a brand that people know and like.

The 54-year-old Thompson was a bit of a surprise choice to head the turnaround effort. His performance at PayPal was impressive, but analyst Mark Mahaney, of CitiGroup, questions whether he's the right man for the job.

MARK MAHANEY: Yahoo is a media company. We just had a CEO at Yahoo over the past two years who came without media background or expertise, and that seemed to have hurt the company's ability to turn around.

KAUFMAN: And Mahaney wonders about the wisdom of choosing someone whose success was in growing a company, not someone who's been focused on creating value and paying of dividends to shareholders.

Another analyst, veteran Silicon Valley watcher Rob Enderle, has a different take. He thinks Thompson, who was at Visa before joining PayPal, might want to take Yahoo in a new direction.

ROB ENDERLE: For Thompson, turning Yahoo into something that's more closely aligned with an eBay or a PayPal - that's probably doable if he starts with Yahoo Finance and works out from there. So it's a stretch and it won't be easy, but at least there's a path to success.

KAUFMAN: One huge decision that still looms over Yahoo is what to do with its 40 percent interest in Chinese search giant Alibaba. Alibaba wants out from under Yahoo, and many analysts think Yahoo should sell its stake and use the cash to refocus the company here at home.

Wendy Kaufman, NPR News. Transcript provided by NPR, Copyright NPR.

Wendy Kaufman