SAN FRANCISCO (MarketWatch) -- Perhaps it's time for the Internet pioneer to change its popular logo from Yahoo! to Yahoo? The company, despite a big house-cleaning over the weekend, still managed to leave a big issue unresolved.
As Yahoo (YHOO) tries to fix its leadership mess, the company made one major mistake in naming its CEO as interim.
Why did the company name the well-regarded Yahoo (YHOO) executive vice president Ross Levinsohn as its "interim" CEO?
Levinsohn was probably one of former CEO Carol Bartz's best hires. He joined Yahoo (YHOO) in October 2010 with a long tenure in media, deal-making and Internet advertising on his resume. He had even spent some years in search, at the early Internet search engine Alta Vista. Some older investors might remember that Digital Equipment Corp.'s Alta Vista was the hot search engine before the rise of Google Inc. (GOOG).
But the Yahoo (YHOO) board managed to prolong the atmosphere of uncertainty by dubbing Levinsohn "interim" CEO, at the same time that former CEO Scott Thompson stepped down amid r?sum?-gate. The company also reached an agreement with hedge-fund investor Daniel Loeb, whose firm Third Point LLC had been seeking four seats on the board.
Many investors cheered the news that Loeb won three seats on the evolving Yahoo (YHOO) board, and five board members were immediately stepping down, including much-maligned Chairman Roy Bostock. (Bostock and the four other board members had already previously announced their plans to not stand for re-election.) But the theme on Wall Street for Yahoo (YHOO) investors on Monday was again uncertainty.
"While we view the removal of Thompson and resolution of the proxy fight as a positive, many questions remain," said Peter Stabler, an analyst with Wells Fargo Securities, in a note to clients. "First and foremost, will the new board team accelerate or alter the company's position regarding the monetization of Yahoo's (YHOO) fast-growing Alibaba stake? Until a decision is made on a permanent CEO, we believe progress here could be stalled."
Indeed, some press reports said that Levinsohn was being considered as the company's permanent CEO. Investors should hope, though, that Yahoo (YHOO) does not waste too much time on another full-on CEO search, especially after the embarrassing blame-game going on with executive search firm Heidrick & Struggles, which Thompson implied was responsible for not catching the error in his resume. Read All Things D report on the blame game.
Investor Eric Jackson, who has stirred up the pot at Yahoo (YHOO) in the past, said in an interview on CNBC earlier Monday that all the chatter on Wall Street about uncertainty was misguided. He also told MarketWatch that the company needs to do a CEO search for the sake of good corporate governance.
"Some of the misguided analyst comments this morning about Yahoo (YHOO) have said the change in leadership is going to create more turmoil inside the company," said Jackson, founder and managing member of Ironfire Capital LLC, which owns Yahoo (YHOO) shares. "I have some news for you sell-side analysts, there would have been a heck of a lot more turmoil if Thompson had stayed on. The morale was below the floor. And I think that morale is shooting up today because in general people like Ross Levinsohn; they like that the board stuff is now settled."
Jackson told MarketWatch he would not be surprised if Yahoo (YHOO) removes the "interim" from Levinsohn's title in a few months, if he is doing well.
Many investors are, as Stabler pointed, out, nervous about Yahoo's (YHOO) talks to seek value from its highly valued Asian assets. But Levinsohn is also well regarded as a deal maker. According to our colleagues over at All Things D, he had been lobbying Bartz to acquire Hulu, as part of his vision for Yahoo (YHOO) to move more into original video.
He also was previously president of News Corp.'s (NWSA) Fox Interactive Media, where he was in charge of day-to-day operations and strategy and acquisitions, such as its mega-deal to buy then-hot social network MySpace. (MarketWatch is also owned by News Corp. (NWSA) Read All Things D on Levinsohn.
So with investors like Jackson calling Levinsohn a "super media executive," who is reportedly well-liked by employees, it's not clear why Yahoo (YHOO) made his appointment an interim one for now. Hopefully the company will soon end the "uncertainty" chatter and just make it official.
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