Yahoo names Paypal boss as new CEO

PayPal President Scott Thompson has been named as the new CEO of Yahoo.

Thompson was instrumental in pushing growth at eBay’s online payments division and Yahoo is hoping that he can turn around its poor performance. He will also get a seat on Yahoo’s board.

Lately Yahoo has been the subject of several buy-out offers and has been attempting to come up with its own answer to its falling market share. At Paypal he had a reputation for strategic risk taking.

Yahoo hopes that hiring Thompson will turn around the company. It’s long been rumoured that Yahoo was up for grabs, but a series of gaffs – like once turning down a generous offer from Microsoft and getting in the way of potential bidders – has left it sitting on the shelf.  

According to the Wall Street Journal, while Yahoo is publicly claiming Thompson will review its web advertising business, insiders think he has been brought in to review the financial muddle surrounding discussions with Alibaba. Alibaba’s Jack Ma has openly said he’d consider buying all of Yahoo “if the opportunity presented itself”.

People familiar with the matter told the WSJ that Thompson will ultimately be responsible for its stakes in Asia, including with Alibaba and Yahoo Japan, as well as talking to private equity investors.

The board doesn’t think a serious bidder is going to appear, according to the WSJ’s sources, but if one does crop up they won’t rule out a sell.

 Shareholders rejected the move and the company’s share price fell by two percent, according to Reuters.

Analysts have said that the announcement was not as positive as news of a company sale. Thompson’s background was in payments and Yahoo is not a payment company.

Thompson told Reuters that he liked to do complicated, difficult, and challenging things so he knows that he will have a considerably hard task in turning around the company’s fortunes.

He ran eBay’s PayPal since early 2008, after being its chief technology officer. According to Yahoo, under his watch PayPal increased its user base from 50 million to over 104 million active users. PayPal processed $29 billion in payments in the third quarter of 2011.

eBay Chief Executive John Donahoe wrote to his staff saying that Thompson’s move was a “shock” given that he had a “passion for Paypal”.