Yahoo response insulting to shareholders, says Loeb
New York - In another scathing letter to Yahoo's board Friday, shareholder and manager of hedge fund Third Point Daniel Loeb has demanded sacking of Yahoo CEO Scott Thompson by Monday noon for inflating his academic record.
Yahoo's admission of "error" in representing CEO Scott Thompson's background is "inadequate," said Loeb. Third Point, which owns 5.8 per cent of Yahoo, is engaged in a proxy war with Yahoo for control of its board
"Yahoo!'s initial response yesterday (Thursday) to Third Point's identification of material inaccuracies in both CEO Scott Thompson's and Director Patti Hart's educational record was insulting to shareholders," wrote Loeb in the letter.
In a statement, Yahoo said, "In connection with the statement the company made earlier today about Scott Thompson, the Yahoo! board will be reviewing this matter, and upon completion of its review, will make an appropriate disclosure to shareholders."
Yahoo first blamed the issue on an "inadvertent error" but provided no further details, which has displeased many on the board.
"Many members of the board are deeply concerned," said one person with knowledge of its thinking.
Loeb's charges have adversely affected perception about Yahoo's vetting process leading to former president of eBay's PayPal unit being hired in January this year.
While Thompson's bio-data filings made by eBay to the Securities and Exchange Commission were accurate, the one on Yahooo's web site incorrectly stated he had a computer science degree.
Nobody has as yet explained how both Yahoo's corporate Web site and also its SEC filings carry the erroneous information and how Thompson failed to notice the error.
It's not clear if there are any legal implications, beyond a needed correction by Yahoo with the SEC which has already removed the entire line about Thompson's education off his Web bio.
While acknowledging the error, the Yahoo press release stated that Thompson has only a bachelor's degree in accounting from Stonehill College and not one in computer science.
Even as Yahoo is probing how the mistake happened or whether its new CEO knowingly falsified his resume the virtual world has been heaping scorn on 54-year-old Thompson and his Stonehill College degree.
Former TechCrunch editor Michael Arrington has been leading the charge, firing off a blog post about "The Disgrace of Yahoo" and changing his LinkedIn account to read that he is both the chief executive of Yahoo and the recipient of the Nobel Prize for Blogging.
The controversy has come at a critical time for Yahoo which is in the midst of massive restructuring after the recent layoffs of 2,000 people.
Besides the proxy fight, Thompson is also preoccupied with selling off Yahoo's Asian assets, renegotiating a new search deal with Microsoft, and figuring out how to improve Yahoo's future prospects.
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