Yahoo Board Casts About for New CEO: No Committee, Six Criteria and AOL Merger-Ready!
Now let’s return from the land of fatuous deal schemes and half-baked plots to buy Yahoo and get to the most critical issue facing its board right now: Finding a new CEO to replace outgoing leader Jerry Yang.
According to numerous sources inside and outside the company BoomTown has spoken to this week, board Chairman Roy Bostock (pictured here) has been asserting a new CEO will be named by the new year.
Only 28 more shopping days left until management clarity!
Well, maybe not so much.
Because there’s actually no “official” search committee that has been appointed by Yahoo’s board, sources said.
Instead, an informal group–with Bostock and board member Gary Wilson at the lead, with help from all the rest of the board–is conducting the effort jointly, along with exec search firm Heidrick & Struggles.
It’s almost like a Berkeley collective!
The board, though, has apparently made a list of six–I have no idea why that is the number chosen–clear criteria for the new leader of Yahoo (YHOO).
The first is that the candidate have “extensive” experience as the CEO of a public company. Another calls for media and advertising expertise. And mergers and acquisitions experience. Also strategic skills.
That’s a tall order, of course, to deliver on in such a short time.
In addition, the idea of bringing in at the same time a No. 1 and No. 2 exec has been considered, with one stronger in media and the other in product and technology.
It is hard to find an exec with skills in both, even in the best of situations.
Think pairing someone like News Corp. (NWS) COO Peter Chernin with Google (GOOG) exec Tim Armstrong or DoubleClick exec David Rosenblatt with, say, Yahoo CTO Ari Balogh and you get the concept.
But many who have spoken to board members at Yahoo said they get the distinct impression that they are leaning toward one of their own–former Nextel head John Chapple, former media exec Frank Biondi, Jr. or former Microsoft (MSFT) exec Maggie Wilderotter (pictured here).
That is due to wanting someone who has operational skills, but also can get things moving at Yahoo, while also being able to continue to work with Yang.
He will remain on the board and regain his title of Chief Yahoo. Sources said Bostock and other board members believe that Yang remains an important and beloved figure at Yahoo among the rank and file and needs to remain involved going forward.
Another key reason for wanting to pick an insider is that Bostock has also intimated that Yahoo was ready to do a deal at any time in the next week or so to merge with AOL–with or without a new CEO in place.
Consummating that might irk an outside candidate, who would have to manage the complex merger without input into its making, rather than a board member, who has been involved.
Talks between Yahoo and AOL have been never-ending and due diligence extensive, as this column has previously reported, although slower of late, because of the uncertainty around Yahoo leadership.
And the price–or, more specifically, the percentage–Yahoo has been willing to fork over to AOL owner Time Warner (TWX) has been the key sticking point, especially as Yahoo’s stock has waned in price.
Yahoo has long wanted to give Time Warner about 20 percent of the merged company, while Time Warner has wanted one-third. At current prices, that’s about $3 billion in value versus $5 billion.
But, if such a deal could finally be struck, it might be a dramatic and apt swan song move for Yang (pictured here), which could inject a bit of excitement into the mostly lackluster situation for both Yahoo and AOL.
Yang and others at Yahoo have also long felt that the company would have more leverage with Microsoft if it also controlled AOL–when and if it formally restarts its talks with the software giant about some sort of search deal.
Interestingly, many close to the situation said that there is still resistance among the “old guard” of the Yahoo board to doing a search deal at all.
New board member and activist shareholder Carl Icahn has loudly called for such a partnership with Microsoft.
But there is still extensive internal debate about whether it is wise to decouple search from Yahoo, many sources said, even if it brings in massive guaranteed revenues and allows Yahoo to cut costs in its engineering ranks.
Said one person close to the situation: “A lot of what has been going on is the board trying to figure out what kind of company does Yahoo aspire to be. That determines the type of person they bring in.”