Can Yahoo recover from CEO drama?

The flailing search giant sacks Thompson for a bogus claim on his resume, plunging the company into even deeper turmoil.

By TheWeek.com May 14, 2012 5:36PM

Yahoo (YHOO) has canned CEO Scott Thompson just four months into the job, after it emerged that Thompson's resume inaccurately claimed a college degree in computer science. (Though Thompson has also been diagnosed with thyroid cancer, it appears the resume controversy decided his fate.)

"Resume-gate" is the latest blow to hobble the company, which has long been losing the battle for online advertising dollars against rivals Google (GOOG) and Facebook. Thompson was the latest in a string of CEOs brought on to mastermind a turnaround, and his dismissal could deepen Yahoo's pain.

Was it a mistake to fire him?

Thompson's exit hurts the company: Yahoo let Thompson go just as "details of his plan for righting" the ship were emerging, says Casey Newton at The San Francisco Chronicle. In his short tenure, Thompson laid off 2,000 workers, launched a patent lawsuit against Facebook, and began reorganizing the company into three distinct divisions. But now that's all out the window, and Yahoo's future looks murkier than ever. The "chaos at the top levels is diminishing the already-low morale at Yahoo, as well as making it more difficult for the company to recruit talent."  

But he deserved to be fired: After this, Thompson will be lucky to land a job at "some rinky-dink tech shop nobody has heard of," says Dan Lyons at The Daily Beast. Thompson not only lied on his resume, but blamed a headhunting firm for the so-called error, a claim that was soon refuted. Ironically, as a veteran executive at PayPal and elsewhere, Thompson didn't need to lie -- it's not like Yahoo hired him because he "had a computer-science degree from Stonehill College. Good grief!"  

In any case, Yahoo is doomed: The former king of the web is in a full-blown "death spiral," in which its revenue keeps falling no matter what it does, says Charles Arthur at Britain's The Guardian. Thompson's replacement, interim CEO Ross Levinsohn, will face the same insuperable challenges. Since the company can't even articulate "what Yahoo is for" in an era dominated by Facebook and Google, it hardly matters who runs Yahoo: The CEO's job "is a poisoned chalice."  

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