CEO Scandal: A Computer Science Degree Is a Big Deal at Yahoo

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Scott ThompsonA throwaway line in a CEO's bio may cost him his job, and it has already apparently ended the gig for the person that hired him.

Reports on Tuesday indicate that Patti Hart -- the Yahoo (YHOO) board member in charge of finding a new CEO at the Internet giant -- will not stand for reelection at the company's next annual meeting, essentially resigning from the board of directors.

It was Hart who oversaw the hiring process after Carol Bartz was dismissed last year. The market seemed to initially like the company's choice of Scott Thompson as the new CEO in January, even if it diminished the chances of an outright sale of the company that speculators were hoping for.

Liar's Poker

Thompson headed up eBay's (EBAY) fast-growing PayPal division, making him a logical choice for an Internet pioneer that was rich in traffic but poor in top-line growth. Thompson rolled up his sleeves, and quickly made a few operating tweaks to the company.

Then came Third Point's Dan Loeb, an activist investor who did a little digging on Thompson and unearthed a deceitful gem. Thompson's bio claims that he received both an accounting and a computer science degree from Stonehill College. It turns out that the school didn't even offer a computer science degree until after Thompson had graduated.

Yahoo claimed that it was an "inadvertent error" last week, but that didn't sit well with investors. It was at worst a lie on Thompson's behalf and at best a failure of Hart's vetting process. Loeb's original report claims that Thompson was listed as having a computer science degree on some representations at eBay, though it never appeared in any official SEC filings.

Will Hart agreeing to step down be enough to satisfy investors? Yahoo has plenty of problems to tackle without this distraction.



One Degree of Separation

Obviously Thompson wasn't brought in because of a bogus degree. He rose up the ranks at PayPal and aced his interviews with Yahoo on his own.

What may have been an innocent act to gain street cred with PayPal and Yahoo engineers who may have looked down on an accountant has snowballed out of control. It's not really about Thompson having the degree or not. Now it's a matter of credibility. Can Thompson regain that?

Credibility may have been at the heart of Hart's decision not to renew her term on the beleaguered company's board. She's CEO at slot machine maker International Game Technology (IGT). Being at the center of an activist attack would reflect poorly on her judgment call. It also would have been embarrassing if shareholders had voted her out at the next annual investor meeting.

Now Yahoo's board will have to decide how Thompson will pay for the unfortunate oversight. If Yahoo doesn't decide, you can be sure that flustered shareholders will let the company know what they think the dot-com behemoth should do.

Motley Fool contributor Rick Munarriz does not own shares in any of the stocks in this article. The Motley Fool owns shares of Yahoo. Motley Fool newsletter services have recommended buying shares of eBay and Yahoo.


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FordChillins

It's funny to hear so many Yahoo employees making these judgements of ethics when they really don't have any. The thing is, all of Yahoo is part of a huge lie. That lie is the total and complete misrepresentation of their photo sharing social network, Flickr. For over 7 years Yahoo has gotten away with misrepresenting Flickr as something it's not. What's more, all the media, and politicians using the platform for PR have been a big part of the lies that forfeit any opinions being expressed condeming Thompson's ongoing fib.

This is because on the outside, Yahoo's Flickr is presented to the public as a work-safe, family friendly place to let anyone 13 and up share photos with others. The real truth is, that under the charade created by slick algorithms and ongoing PR malarky, Flickr is a huge pron site hosting tons of people that share that adult content knowingly with children, without much suspicion by anyone.

Obama, Romney, and a slew of others like most of the Texas government have no problem with the fact that this gross misrepresentation has afforded Yahoo's Flickr the right to bypass filtering and flow right into grade schools and libraries, and most of all, into homes of trusting parents, fooled into thinking Flickr is safe. 

Only one person has ever come out and called Flickr what it really is. That is Nicholas Carlson of Business Insider. His article last year tells the real truth. Nobody here will share that truth with you, so they are part of the lie too.
When confronted on it the other day, all C-Net's Steve Shankland to say was, in typical response, "so what? It's what the internet is all about anyway." But we are not talking about any typical adult website, we are talking about Yahoo. A company that is trusted by millions of people to do the right thing, honestly. That's why so many of their advertisers baulked when confronted with the truth.
That is why everyone at Yahoo is a liar, just like their CEO, and just like these media people are too. Freedom of speech is one thing and we don't care much about the pron either way. It's the huge, accepted lies that bother us, and the hypocrisy that dominates our society in places like this.

May 09 2012 at 4:02 PM Report abuse rate up rate down Reply
natezim

It is now up to the shareholders and the board to deal with his credibility. If they believe he can deal and exceed his expectations retain, if not, dismiss!

May 09 2012 at 1:57 PM Report abuse rate up rate down Reply
white.shorts181

WHAT is the big deal? ALL business executives are liars and cheats. So what? Board members, vice presidents, presidents, CEO's, CFO's, and especially INVESTORS are insufferable liars, crooks, and thieves. This guy has demonstrated that he can do the job. All of a sudden he needs a degree? If anything, this guy just proved what a complete fraud everyone else is! Get off his back - let him do his job. He's putting money in your pocket, so what are you bitching about?

May 09 2012 at 1:27 PM Report abuse rate up rate down Reply
morphiss7

This guy is a liar and a cheat !!! Who working for this guy would have any respect? Its amazing Yahoo hasnt dumped the guy yet !!!!! Because the board has dragged their heals, they have lost all credibility. Obviuosly they dont care if a cheat heads their company !!! WOW !!!!! He has no credibility and the company has lost any it had.

May 09 2012 at 11:17 AM Report abuse rate up rate down Reply
TheClaw

It's about integrity and truth. Not that I'd expect much intelligence from AOL these days. You guys are on par with Yahoo on the bottom of the barrel these days anyways.

May 08 2012 at 4:54 PM Report abuse rate up rate down Reply