) will reportedly add Max Levchin, the co-founder and former
Chief Technology Officer of PayPal, to its board. This begs one
simple question: why? It was not that long ago that Yahoo hired a
former PayPal exec, Scott Thompson, to lead the company. He came
to Yahoo with a stellar resume, touting years of success at
PayPal, where he served as President. According to his
bio on Businessweek
, Thompson helped "scale it through its most rapid growth years
growing it from $1 billion in revenues to $4.4 billion in
revenues, and established it as the leading global online payment
Prior to his role as President of PayPal, Thompson served as
the firm's Senior Vice President and the Chief Technology
Officer. When he moved to Yahoo, some analysts believed that the
company had struck gold. Trip Chowdhry, Managing Director of
Equity Research at Global Equities Research, predicted that Yahoo
(which traded for roughly $16 at the time) would go to $100.
Chowdhry believed that if Thompson was given the freedom to
reposition Yahoo as a mobile payments company, it could
experience massive growth.
Roy Bostock, who was Chairman of Yahoo at the time, boasted
about Thompson's appointment. "Scott brings to Yahoo! a proven
record of building on a solid foundation of existing assets and
resources to reignite innovation and drive growth, precisely the
formula we need at Yahoo," Bostock said in a
. "His deep understanding of online businesses combined with his
team building and operational capabilities will restore the
energy, focus, and momentum necessary to grow the core business
and deliver increased value for our shareholders. The search
committee and the entire Board concluded that he is the right
leader to return the core business to a path of robust growth and
All that praise came to an abrupt end when it was revealed
lied on his resume
Now Yahoo wants to hire Levchin, another PayPal exec. While it
would be unfair to assume that all PayPal employees are the same,
Levchin is somewhat of an unusual hire.
At first glance, Levchin's credits seem to be very impressive.
In addition to his role as the CTO of PayPal, Levchin founded
Slide (a media-sharing service for social networks) and sold it
to Google (NASDAQ:
nearly $200 million
. He helped in creating one of the first commercial
implementations of CAPTCHA. Levchin also provided venture capital
to Yelp (NYSE:
Yahoo might be wondering if Levchin can bring a similar degree
of success and innovation to its company. However, not all of
Levchin's creations have thrived. Google closed Slide
just one year
after its acquisition. CAPTCHA may be used by thousands companies
but it is highly regarded as a
. Yelp, the company Levchin helped fund, has lost more than 20
percent of its value since its IPO in March.
If Yahoo hopes to become a leader in mobile payments as
Chowdhry predicted, Levchin might be a good guy to have on the
board. Even so, it is rare that one person has the level of
skill, talent and luck that are necessary to produce two success
stories within the same industry.
Levchin may be one of the smartest men in technology. He may
be able to provide Yahoo with billions of dollars in value. It is
very unlikely, however, that he will be able to help Yahoo become
the next PayPal.
(c) 2012 Benzinga.com. Benzinga does not provide investment
advice. All rights reserved.