Yahoo chief quits amid claims of fake qualification

Yahoo's chief executive Scott Thompson quit on Sunday as the struggling web giant sought to defuse a row over an allegedly fake computer science degree on his CV. After a board meeting on Sunday morning, the company announced that Thompson, who has led the internet services firm for less than six months, would be replaced by Ross Levinsohn with immediate effect. Levinsohn is a former News Corp executive who presided over the Murdoch-controlled media firm's ultimately disastrous purchase of MySpace in 2005. Yahoo said Roy Bostock, the company's chairman, would also leave and be replaced by Fred Amoroso, a veteran technology executive. Thompson has been under pressure since activist shareholder Daniel Loeb of the hedge fund Third Point claimed that Thompson had misrepresented his degree. Thompson was brought in from PayPal, the online payment firm where he was president, in January. His arrival followed the controversial ousting of Carol Bartz, Yahoo's previous chief executive, who claimed the company had "fucked her over" after she failed to turn the struggling internet service firm round. But less than six months later it was revealed that Thompson's resumé claimed he had obtained a bachelor's degree in computer science and accounting from Stonehill College in Easton, Massachusetts. The college subsequently confirmed that he had achieved only the accounting degree. Thompson reportedly blamed the error on a head-hunting firm, Heidrick & Struggles, which had worked on Yahoo's search for a chief executive officer. But the firm said that was "verifiably not true". A special committee was established earlier this month to review the situation. Yahoo's board had been due to meet on Sunday to discuss its findings and other changes. Third Point, a hedge fund that owns 5.8% of the firm's shares, had wanted to install its own choice of directors at Yahoo and had pushed for Amoroso to join the board of directors. Loeb and several other executives close to Third Point will now also join Yahoo's board. The firm has agreed to halt its fight. "The board is pleased to announce these changes and the settlement with Third Point, and is confident that they will serve the best interests of our shareholders," Amoroso said in a statementon Sunday night. Despite a massive online presence, Yahoo has been struggling for years to keep up with Google and Facebook. Yahoo's share of overall US online ad revenues, which reached 15.7% in 2009, declined to just 9.5% last year, according to eMarketer. While the online advertising market is expected to grow 23.3% to $39.5bn this year, Yahoo's share of revenues will fall further to 7.4%, eMarketer estimates. The departure of Thompson and Bostock is a victory for Third Point. Loeb said: "We are confident this board will benefit from shareholder representation, and we are committed to working with new leadership to unlock Yahoo's significant potential and value." Yahoo owns significant Asian assets, including a stake in Alibaba, China's largest e-commerce business, but has struggled to reach an agreement on a sale. Thompson was reportedly close to a partial sale of the Alibaba holding shortly before his plans were derailed by the allegations about his qualification. Yahoo bought the 40% stake in Alibaba for $1bn in 2005 and its holding is now estimated to be worth $16bn. But successive managements have failed to reach any agreement on a sale. Last month, Thompson announced a round of layoffs at Yahoo, totalling 2,000 jobs, about 14% of the total. It was the sixth round of job cuts in the past four years for the beleaguered company. Bartz, too, had sought to revive Yahoo's fortunes by cutting costs. She replaced Yahoo's co-founder Jerry Yang, who had returned to the company as chief executive in 2007 and in 2008 rejected a $44.6bn offer from Microsoft. Last week, Yahoo was valued at $18.51bn.