Yahoo chooses Paypal president as new chief executive

Jan 4, 2012, 17:38 GMT

San Francisco - Struggling internet pioneer Yahoo appointed PayPal president Scott Thompson as its new chief executive Wednesday, as it seeks to regain users and advertisers siphoned off by rivals like Google and Facebook.

Thompson replaces Carol Bartz, who was sacked in September after failing to boost revenues at the company, which was one of the first popular directories and search engines on the internet.

Prior to Bartz, the company was led by founder Jerry Yang, who stepped aside after disastrously rejecting a 45-billion-dollar bid from Microsoft in 2008, only to see the value of Yahoo halved in the following three years.

Nevertheless, Yahoo is still the fourth most popular site in the world, with its 700 million users constituting only 100 million less than Facebook's count, according to web tracking firm Alexa.com.

The appointment comes amid negotiations for Yahoo to shed a large part of its stakes in its two major Asian partners - Alibaba in China and Yahoo Japan. With the company standing to earn some 17 billion dollars on the deals, Thompson could have a huge war chest to fund improvements in the company's US and European properties.

But, in a statement released upon his appointment, he gave little hint of the immediate action he would take to correct Yahoo's course.

'Yahoo is an industry icon and I am very excited about the prospect of working with one of the great teams in the online world to deliver Yahoo's next era of success,' Thompson said. 'Yahoo has a rich history and a solid foundation to build on, and its continued user engagement is one of the many reasons for my enthusiasm.'

Yahoo chairman Ray Bostock said that Thompson's success in doubling online payment service PayPal's user base since 2008 was key to his appointment.

'Scott brings to Yahoo a proven record of building on a solid foundation of existing assets and resources to reignite innovation and drive growth, precisely the formula we need at Yahoo,' said Bostock.