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Sunday, January 8, 2012

Yahoo Names Paypal Head As New CEO

Yahoo's previous turnaround attempts have flopped under three different leaders with dramatically different backgrounds - former movie mogul Terry Semel, beloved Yahoo co-founder Jerry Yang and profanity-spewing Silicon Valley veteran Carol Bartz.

Now, the struggling Internet company is making yet another unorthodox choice with announcement that it has lured away Scott Thopmson from a lower-profile job running eBay's Thriving Paypal service to step into the pressure-packed position as Yahoo's fourth CEO in less than five years.

The appointment  raised questions among analysts, since Thompson, 54, has no experience in online content and advertising, Yahoo's chief sources of revenue. Te timing of Thompson's hiring also came as a surprise, given that Yahoo's board has been considering a sale of all or part of the company since firing Bartz four months ago. With Thompson's selection, Yahoo's board is signaling that it believes the company can still rebound, despite several years of losing grounds to Google and Facebook in product innovation and online advertising.

Thompson's job will be to revive Yahoo's revenue growth and repair the company's fractured relationship with investors fed up with a litany of broken turnaround promises.

Analysts estimate Yahoo's revenue last year totaled about $5 billion, down from nearly $7 billion in 2007. During the same span, Google's revenue soared from $17 billion to an estimated $38 billion. Privately held Facebook doesn't disclose its finances.

Thanks largely to cost-cutting measures imposed by Bartz, Yahoo has become more profitable. Last year, it earned an estimated $1.1 billion, up from $660 billion in 2007.

Still, investors are disappointed with the downturn in revenue at a time when advertisers are spending more money on the Internet.

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