The 5 Yahoo! CEOs You Meet in Heaven

Well, the Scott Thompson era didn't last long at Yahoo! (Nasdaq: YHOO  ) .

I compared being the helmsman at the dot-com pioneer to being a Spinal Tap drummer when Thompson came aboard.

"Heading up Yahoo! is starting to seem like the ever-changing role of drummers in This Is Spinal Tap, each one lasting only long enough to expire in grandiose fashion," I wrote at the time.

Well, the snowballing of a little white resume lie may be the spontaneous combustion of expirations.

Yahoo! is going to have its hands full as it tries to smoke out a new leader. The egg-faced board is going to have to be thorough in verifying every line item for potential candidates. It's also going to be hard to recruit top talent when an activist is never too far away from pushing for an outright sale of the company.

Let's hope the new CEO recognizes the fatal flaw in the company's previous leaders. Let's go over the five Yahoo! CEOs that you meet in heaven -- or perhaps in this case purgatory is a better description.

1. The Tinseltown Darling -- Terry Semel spent two dozen years at Warner Bros. before assuming the top spot at Yahoo!. At the time, the convergence of the Internet and entertainment made this an intriguing position. Yahoo!'s lackluster performance after the dot-com bubble and its reported inability in acquiring Google (Nasdaq: GOOG  ) sunk Semel's chances in 2007. He received roughly $500 million in compensation during his years at Yahoo!, which in Hollywood terms is nearly two John Carters.

2. The Too-Proud Founder -- Co-founder Jerry Yang took over after Semel was cut loose in 2007. An original visionary coming back after a seasoned CEO stumbles obviously worked with Apple's Steve Jobs. Google's Eric Schmidt didn't stumble, but Yahoo!'s larger rival was able to pull off a seamless transition to a co-founder last year. The problem with Yang is that he probably wasn't the best person to have at the helm when Microsoft (Nasdaq: MSFT  ) was willing to pay more than $30 a share for Yahoo!. A CEO who was a bit more detached and bled less purple would've probably jumped at the offer that eventually rose to as much as $33 a share.

3. The Potty-Mouthed Throwback -- Carol Bartz came aboard with a no-nonsense approach. What she lacked in dot-com experience she made up for in old-school tech leadership and occasionally dropping f-bombs in conference calls. Her undoing came after striking a deal to outsource its search through Microsoft's Bing. It sold out its dignity for a more predictable stream of Microsoft checks.

4. The Likely Liar -- Thompson will walk away with more money than he probably deserves for his mere months of service at Yahoo!. The deep-fried irony here is that he obviously didn't need to have a bogus computer science degree on his resume. His work at PayPal alone was enough to win Yahoo!'s vote of confidence. However, we live in a tech world where a mere accounting degree is apparently frowned upon by Silicon Valley's tech elite. The next CEO is going to get grilled like a Reuben sandwich.  

5. Yahoo!'s Next CEO -- Why am I dismissing the dot-com giant's new leader before the eventual CEO even arrives? Well, let's face it, there may never be lasting peace at Yahoo!. Ross Levinsohn -- interim helmsman -- is going to have a hard time finding someone acceptable to hand his crown to. There doesn't seem to be an organic way out of its flattish revenue growth. Making nice with Third Point over the weekend really won't silence the call for Yahoo! to unload its Asian assets, which is where the real growth has been in recent years. All of Yahoo!'s recent CEOs have announced layoffs that may have improved margins in the near term, but the shareholder cry for real growth is lost in the purple haze.  

It's not going to be an easy search for a CEO who can introduce a new layer of mistakes here.

Start bleeding purple
Yahoo! may or may not be looking to cash out of its Asian assets, but others are hoping to expand overseas. There are three American companies set on dominating the world. Yahoo!, as you can imagine, isn't one of them. It's a free report, and it's yours now.

The Motley Fool owns shares of Google, Yahoo!, and Microsoft. Motley Fool newsletter services have recommended buying shares of Yahoo!, Microsoft, and Google. Motley Fool newsletter services have recommended creating a bull call spread position in Microsoft. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.

Longtime Fool contributor Rick Munarriz calls them as he sees them. He does not own shares in any of the stocks in this story. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.


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  • Report this Comment On May 14, 2012, at 11:06 AM, TechJunk13 wrote:

    Nice one Rick. But I believe that its Jerry Yang and not Wang. But anyways, its a real big circus.

  • Report this Comment On May 14, 2012, at 11:19 AM, TMFKlesta wrote:

    @TechJunk13

    The name spelling is fixed. Thanks for letting us know!

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