Yahoo Looking for New CEO
Friday, March 9th 2001, 12:00 am
By: News On 6
A few names have surfaced as possible successors to Tim Koogle as chief executive at Yahoo Inc. But, one might ask, who would want to step up to a plate with so much at risk?
Among the most frequently cited candidates Thursday, a day after Yahoo said it was searching for a new CEO, was Robert Pittman, co-chief operating officer of AOL Time Warner Inc. But Mr. Pittman said publicly that he does not want the job.
Yahoo's announcement that it would miss first-quarter and full-year sales targets and break even at best for the year sent tongues wagging in tech circles. The bellwether Internet portal company has been an alluring symbol of the power of the new medium, so its troubles spill over onto the rest of the industry, analysts said.
Shares plunged $3.31 Thursday to $17.69.
"Yahoo is the first tier, so if it's hurting, the second- and third-tier companies must be gasping," analyst John Corcoran told ON24, an online financial news network. "The only healthy one is AOL."
As Yahoo tries to mature into an operating company with reliable sources of revenue, it will need an executive with a proven track record, not necessarily someone from the media, entertainment or Internet industries, one headhunter said.
"The Internet is bleeding," said John McFadzean, a partner in the technology practice of Ray & Berndtson, a Fort Worth-based search firm.
"They are going to need someone with more operating experience," said Mr. McFadzean, speaking from the firm's offices in Silicon Valley.
"Do they need a genius? Not necessarily. Someone from Silicon Valley? No. They need someone with intellect and expertise in growing and scaling a business on a global scale," he said.
Absent a new CEO, speculation was rampant in the markets that Yahoo might be a buyout candidate.
The French company Vivendi came up, as did Walt Disney Co., News Corp. and Viacom Inc. No offers have surfaced yet, and Yahoo has adopted a poison pill.
Mr. Corcoran said the company might not need the pill because whoever might buy it "would have to compete with AOL."
Mr. McFadzean said Yahoo's leaders â€“ Mr. Koogle is the oldest at 49 â€“ have shown they can take an iffy IPO to a sizable company.
"But what you see in these young tech companies is that people who are part of the original management team do a good job of getting the company to a certain level but then cannot scale it any farther."
Sky Page, vice president of A.T. Kearney's global executive search unit, said any new CEO will need focus.
"He or she will have to get the wagon train over the mountain without getting thrown off by things that nag at them on the way," said Mr. Page, who is based in Dallas. Electronic Data Systems Corp. of Plano owns A.T. Kearney.
"Whether they've developed that skill in the tech sector, I'm not sure I care. But the very best CEOs I've seen understand what their key people are good at and clear decks for them," he said.
In the case of Yahoo, Mr. Corcoran put it bluntly. "I think they are going to need a combination of Hercules and Superman to fill this spot," he said.