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Monday, May 14, 2012

Yahoo Restructuring Again

Story first appeared in USA Today.

Yahoo has hit reboot again.

The CEO and five board members were shown the door on Sunday following calls for the chief's head over résumé inaccuracies and pressures to reconfigure the board.

The struggling Internet giant, already in a massive turnaround effort, has named an interim CEO and chairman of the board.

Yahoo became embroiled in the résumé flap when activist shareholder Third Point, which holds a 5.8% stake, disputed the CEO's résumé.

The Third Point CEO said the résumé inaccurately claimed a degree in computer science, calling into question the Yahoo CEO as well as the head of the hiring committee. Yahoo acknowledged the inaccuracy and bowed to pressure from Third Point to review the matter.

The fallout comes as Third Point had increased demands for the CEO's removal and a board makeover. Under the shake-up, Yahoo has relented to the demands for placement of Third Point members on the Yahoo board.

The board believes in the strength of the company's business and assets, and in the opportunities before us. The résumé flap is the latest black eye for Yahoo, which has been under pressure from shareholders to reshape itself amid a withering assault from Google and Facebook.

It's very damaging, and speaks so negatively to the vetting process. The CEO had been hired for strategy, branding and marketing — not computer science.

The January hiring of the CEO, who had been the highly successful CEO of eBay's PayPal unit, was Yahoo's latest stab at a turnaround. But his padded credentials raised questions about his integrity and the Internet pioneer's hiring and vetting process.

The hasty exit complicates a restructuring plan put into place that includes 2,000 layoffs. It's just the latest in a series of missteps and stumbles in the past few years highlighted by multiple CEOs, executive defections, reorganizations and questions about deals with tech partners Microsoft and Alibaba.

It all adds up to inheriting a wayward ship with a reconstituted board and uncertain future.

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