Yahoo brings in PayPal boss

SAN FRANCISCO – 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 Wednesday’s announcement that it has lured away Scott Thompson 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. The 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 ground to Google and Facebook in product innovation and online advertising.

Even so, a sale of Yahoo’s most prized assets – its investments in Yahoo Japan and China’s Alibaba Group – is likely. Softbank Corp., Yahoo Japan’s largest shareholder, and Alibaba Group reportedly have proposed buying back most of Yahoo’s holdings in the Asian companies in a deal valued at $17 billion.

Yahoo Chairman Roy Bostock dismissed recent speculation that Yahoo might team up with buyout firms to take the company private.

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. Yahoo’s stock hasn’t traded above $20 in more than three years. On Wednesday, it dropped 51 cents, or 3 percent, to close at $15.78.

“There is no shareholder or investor who will be less patient than me,” Thompson, a Boston native who still has his hometown accent 18 years after moving to California, said in an interview. “We have got to be able to grow this business. There is no question that is priority No. 1.”

Yahoo was attracted by Thompson’s impressive track record at PayPal, where he was chief technology officer for three years before becoming the online payment service’s top executive in 2008. PayPal’s annual revenue more than doubled from $1.9 billion when Thompson took over the division to an estimated $4.4 billion last year.

In a conference call, Thompson said it is too early to offer details on how he intends to revive Yahoo’s revenue growth. But he indicated that one of the keys to success will be Yahoo’s ability to decipher the information that it gathers on the preferences of its 700 million users so it can help advertisers target their commercial pitches.