|EcommerceBytes-NewsFlash, Number 2803 - May 14, 2012 - ISSN 1539-5065 2 of 4|
Yahoo didn't hire former PayPal President Scott Thompson because he had a Computer Science degree, but he lost the job on Sunday because he didn't have one. The real question now that Thompson's officially gone from Yahoo is where will he end up? A smart bet is on one of the big payment processing companies that are trying to beat PayPal at mobile payments.
Hedge fund Third Point LLC, which manages $9 billion in assets of which over $1 billion is invested in Yahoo, has been battling Yahoo's Board of Directors and has been fighting to get its own people on the board. Third Point was behind Thompson's resume-gate, exposing the fact that Yahoo's SEC filings incorrectly represented Thompson's educational background. (See details in, Former PayPal President Scott Thompson Caught in Resume Gate.)
Neither Thompson nor Yahoo handled the situation well from a public relations standpoint. While Thompson's been hammered for not correcting his biographical information on eBay's website, which then made it into Yahoo's SEC filings, no one has been able to point to his ever actually deliberately claiming he had a CS degree when job hunting.
The origin of the phantom degree matters. Yahoo didn't provide any information on the circumstances surrounding Thompson's departure. In its press release issued on Sunday, it announced Thompson's interim successor, and mentioned Thompson's departure as almost an afterthought. In the second paragraph, Yahoo wrote, "Mr. Levinsohn replaces Scott Thompson, former Chief Executive Officer, who has left the Company."
Did he resign or did the Board fire him? Will he be entitled to his golden parachute written in to his offer when hired in January?
The lawyers may be battling that one out.
But why would one of Yahoo's biggest investors inflict this pain on the company? It may seem to observers that Third Point is cutting off its nose to spite its face. After Yahoo mucked up with its previous CEO Carol Bartz, here we go again,...
Third Point itself wrote, "we take no joy in witnessing this carnage" - the very carnage it unleashed. But Third Point got what it wanted - seats on the board, giving it greater control over Yahoo. In the settlement agreement, three Third Point nominees - Daniel S. Loeb, Harry J. Wilson, and Michael J. Wolf - will join the Yahoo Board, effective May 16, 2012.
Don't be surprised if Yahoo itself goes on the block soon - some shareholders would rather have fast cash than see long term investment, but that's pure speculation, of course.
As for Thompson, where does he end up? There are three possibilities. As an executive at a major payment processing firm such as Visa, Mastercard or American Express; the CEO of a startup or small non-public company; or a partner at a venture capital firm.
The big players in payment processing are charging into mobile payments - though possibly not fast enough for Thompson. Visa just launched its V.me digital wallet in beta, and MasterCard unveiled its PayPass Wallet Services during CTIA Wireless last week. Kenneth Corbin sent back reports from the conference on the state of mobile payments, where some experts said the industry was waiting customers to decide which wallet to adopt.
While resume-gate has been embarrassing, unless it's proven Thompson deliberately misled Yahoo about his educational background, this is not a career-ending incident.
Thompson understands the digital wallet and mobile payments, and hiring him would give a payments company insight into PayPal's secret sauce and access to Thompson's connections, as well as his expertise in building up payments in Asia.
Creating a special role for Thompson could give one of the big players the edge they need to make their offering the winning digital wallet.
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Update 5/14/12: The Wall Street Journal reports that Scott Thompson was diagnosed with thyroid cancer last week, which influenced his decision to step down from Yahoo. But the Wall Street Journal's blogger Kara Swisher wrote, "all that aside, he was given no choice in the matter by the Yahoo board, numerous sources said. The parting was almost entirely due to the mess about the botched bio and all its implications."
About the author:
Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to firstname.lastname@example.org.
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