Yahoo CEO Scott Thompson To Unveil Turnaround Plan Next Week

SAN FRANCISCO -- Yahoo CEO Scott Thompson plans to tell the struggling Internet company's employees more about his turnaround strategy next week.

Thompson also sought to boost sagging employee morale in a staff memo Thursday. It came a day after Yahoo Inc. began laying off 2,000 workers in the biggest purge in the company's 17-year history.

The 14 percent cut in Yahoo's workforce marks Thompson's most dramatic move since he was hired three months ago. Yahoo Inc., which is based in Sunnyvale, Calif., lured him away from eBay's PayPal payment service.

"I have seen big turnarounds before, and this company has the foundation, the spirit, the backbone and the creativity to get it done," Thompson wrote.

Although he didn't provide specifics, Thompson hinted that he plans to streamline Yahoo's management team to enable the company to keep pace with Internet search leader Google Inc. and social networking leader Facebook Inc. in the race to sell online advertising.

"There's a lot to do, and that's why I can't stress enough that we all need to focus on getting stuff done," Thompson wrote. "Getting stuff done is short hand for eliminating bureaucracy and barriers so we can all innovate as fast as our customers and the industry require."

After meeting next week with employees, Thompson has promised to share more details about his plans with Wall Street on April 17, when the company is scheduled to release its first-quarter earnings report.

As has been the case through most of the past four years, the results are expected to show a decline in Yahoo's revenue even as advertising continues shifting to the Internet.

One of Yahoo's largest shareholders, activist investor Daniel Loeb, criticized Thompson for handing out layoff notices before spelling out his vision for the company.

In Thursday's memo, Thompson said he wanted to be "fair and respectful" to the laid-off employees before discussing the future.

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Comments

[kingemperor]

03:30 AM on 04/08/2012

Of course Yahoo's suffering, they can't compare to google. Learn from google and make your methods better, then you'll be a great company.

[waldopepper]

03:22 AM on 04/08/2012

I believe the plan will entail sending Army Group Steiner against the 1st Ukranian Front. Then in a daring pincer movement against the remaining Red forces and then pressing boldly on to Moscow before the onset of Winter. Or maybe I am confusing this with the Alec Guiness portrayal of Hitler.

[Stefano Seebing]

01:22 PM on 04/06/2012

Just sell to MS and peace out.

[time1910]

05:29 AM on 04/07/2012

Is MS still interested?

[sking007]

01:02 PM on 04/06/2012

Meanwhile, until that strategy is released, Scott has been occupying his time removing a number of personal items from his office.

[tumbler snapper]

12:19 PM on 04/06/2012

A Romney recovery plan will be implemented. Drain what blood remains, then abandon the corpse.

[becky bradshaw]

10:52 AM on 04/06/2012

Thompson means well. He has a strong technical background, and should successfully operate the company. The problem is in the board of directors. Hedge Fund Managers have taken control, and will restrict Thompson to short-term thinking.

In strong contrast to Thompson, the new directors lack the technical qualification to manage a company like Yahoo. They are bean counters. If more than one quarter's earnings fall short of Wall Street expectations, Thompson will be on a very short leash. (http://venturebeat.com/2012/03/26/reading-between-the-lines-yahoos-new-board-members-show-activist-investor-dan-loeb-is-already-winning/)

If we read the fine print, the Hedge Fund Managers will profit regardless of Yahoo success. Their primary motivation is fees, which are generated by churning the stock, not by increasing its long-term value.

We have seen this before with a different name. Remember Michael Milkin. (http://money.howstuffworks.com/personal-finance/financial-planning/junk-bond1.htm)

[johnpet]

10:51 AM on 04/06/2012

Yahoo, watch Seinfeld; "If every instinct I've had is wrong, then the opposite would have to be right."

So, take every idea you have for the company, then do the opposite.

[Valerio della Porta]

08:02 AM on 04/07/2012

Couldn't agree more. Let's start with the first one: instead of turning the company around let it die of a peaceful death.