Yahoo's ex-chief executive Scott Thompson, who quit on Sunday as Yahoo sought to defuse controversy over allegations Thompson lied on his resume, has reportedly been diagnosed with thyroid cancer.
After a board meeting on Sunday morning, the company announced that Thompson, who had led the embattled web giant for less than six months, would be replaced by Ross Levinsohn with immediate effect.
Thompson's decision to step down from Yahoo was in part influenced by his cancer diagnosis, reports the Wall Street Journal. But his resignation had seemed inevitable amid demands by Daniel Loeb, an activist shareholder whose firm, Third Point, owns a 5.8% stake in the company.
Thompson's diagnosis had reportedly been made even as the board was investigating why the his academic record had erroneously included a computer science degree -- a falsehood that appears on Yahoo's regulatory filing.
Over the weekend, Yahoo said it would appoint several new board members including Third Point's Loeb, the person who had had spotted Thompson's misstated academic record in a Yahoo regulatory filing in April.
Yahoo also announced that Roy Bostock, Yahoo's chairman, would leave and be replaced by Fred Amoroso, a veteran technology executive.
Despite a massive online presence, Yahoo has been struggling to keep up with Google and Facebook. Yahoo's share of overall U.S. online ad revenues, which reached 15.7% in 2009, declined to just 9.5% last year, according to eMarketer.
Yahoo shares rose 1.7% after Sunday's announcement.
Macquarie analyst Ben Schachter said that the management changes were necessary, even though he worried that Yahoo would essentially start from scratch again with its strategy.
"As a practical matter, what this means for the company is that the past four months have been little more than a false start, and it must once again start at the beginning in terms of establishing a strategic direction," Schachter said.
Analysts welcomed Levinsohn's appointment because of his history in media and advertising sales. Schachter said he may be "auditioning to take on this role on a permanent basis."
However, even with Levinsohn at the helm, Schachter said that Yahoo's future is uncertain: "The bottom line is that the situation at Yahoo is a mess."
