Yahoo's core values include "fun," "community" and "excellence" (which the company defines as "winning with integrity"). It's too bad they don't include "provocation," "confrontation" and "alienation" - because then CEO Scott Thompson would be having a banner year.
Thompson left eBay (EBAY) as head of PayPal to lead Yahoo (YHOO) in early January, saying he felt a "real sense of urgency" to turn things around at the web company. He was the company's fifth CEO in five years, a period that saw Yahoo's stock plunge after rejecting a takeover bid by Microsoft (MSFT) and vacillate around the $15 a share level for years as the company grew more marginal in an increasingly social web.
True to his word, Thompson began a series of bold initiatives less than three months into the job. In the process, he's roiled the ranks inside Yahoo with talks of layoffs, set the stage for a proxy battle with the board and angered many peers in Silicon Valley with a patent lawsuit against Facebook. It's far from clear that these moves will help turn Yahoo around. But they've already made the company a lot more interesting.
It seems like years since Yahoo has done anything to capture the web industry's interest. Early on, Yahoo was notable as the only so-called "web portal" that survived the first, volatile years of the web. It succeeded with popular features that have become mainstays of the web today: web mail, news aggregation, fantasy sports and financial data – all of them simple and easy to access.
But the web evolves quickly and by 2005, social networking was clearly the future. Here again, Yahoo positioned itself as an early leader, buying Flickr's photo-sharing and del.icio.us's social bookmarking site, turning the web giant into an early leader in social networking. And it cultivated a community of coders with its Developers Network.
But soon enough, all of these promising initiatives seemed to suffocate inside Yahoo's bureaucratic miasma, and the company became distracted by the high drama of a protracted takeover battle with Microsoft. Since then, Yahoo has seemed adrift as Google (GOOG) and then Facebook set the agenda for web innovation. For the past three or four years, barring some frank and controversial comments by ex-CEO Carol Bartz, Yahoo has been as exciting as a rose losing its bloom.
But that has changed this month. Thompson is showing himself to be a CEO with a talent for tipping over apple carts. First came reports that Thompson's restructuring could cost thousands of Yahoo's 14,000 employees their jobs. He abruptly cancelled a Florida meeting for 1,300 Yahoo sales employees. Then he tried to soothe workplace tension with a memo hectoring employees into working harder and faster.
Last week, Yahoo sued Facebook for infringement of 10 patents – including advertising, privacy, messaging and social networking – just two weeks after sitting down with Facebook to discuss licensing fees. Overnight, Yahoo became the web's most reviled patent troll, bilking a more nimble rival in a move decried as "pathetic," "desperate" or worse.