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Yahoo and AOL are both former tech/media darlings in the midst ofturnaround efforts, but lately they've had a strikingdivergence of fortune. One is mired in a tawdry CEO resume-puffingcontroversy, while the other is enjoying Wall Street favor. Bothhave received heaps of abuse in recent years as they'velabored in the shadow of Google and Facebook, and both still face asteep climb to get anywhere near their former glory. But so farthis year, AOL shares have soared over 70%, thanks in part to a savvy, billion-dollar patent sale toMicrosoft, while Yahoo shares have languished, down 5% Indeed, Yahoo appears to be hovering close to disarray. Thetroubled Internet pioneer finds itself embroiled in a bizarreepisode involving its CEO Scott Thompson, who has admitted hedoesn't posses the computer science degree he listed on hisresume when he got the Yahoo job. AOL, by contrast, is riding awave of shareholder good will after raising $1 billion selling mostof its patents to Microsoft. And on Wednesday, AOL beat Wall Streetexpectations with a four-fold increase in profit. (Disclosure: Thisauthor was a reporter at AOL Daily Finance from 2009-2010.) One thing both companies have in common: a contentious proxy fightwith a powerful shareholder. AOL has so far managed to fend off itscombatant, a hedge fund named Starboard Value that owns 5.3% of thecompany's shares. Yahoo, meanwhile, has been bloodied by itsfoe, finance titan Dan Loeb's Third Point hedge fund, whichowns 5.8% of its shares. Loeb has waged an aggressive campaignagainst Thompson, recently — and correctly — callingthe CEO's academic record into question. ( More : As Yahoo Cuts Jobs, Proxy Battle, Facebook Patent War Heat Up ) Thompson, it turns out, embellished his resume by adding anon-existent computer science degree from Stonehill College, in theBoston area, which he attended three decades ago. The phantomcomputer science degree was listed on Thompson's officialYahoo bio, as well as filings with the Securities and ExchangeCommission. Apparently no one at Yahoo checked out Thompson'sdegrees when he was hired, just a few months ago. Loeb has demandedthat Thompson be sacked over the bogus credential. Yahoo initially called the matter an inadvertent error and saidit in no way alters that fact" that Thompson is a"highly qualified executive with a successful track recordleading large consumer technology companies. Then as thecontroversy grew, the board formed a "special committee" to review Thompson s academicrecord, as well as "the facts and circumstances related tothe review and disclosure of those credentials" in his hiringprocess. Just hours later, Yahoo announced that International Game Technology CEO Patti Hart, the boardmember who played a key role in Thompson's hiring, would bedeparting. (Her academic credentials have also been questioned.) Meanwhile, perhaps smelling blood, Loeb escalated his assaultWednesday, demanding that Yahoo CFO Tim Morse or media chief RossLevinsohn become interim CEO. Third Point has over $1 billioninvested in Yahoo, and we take no joy in witnessing this carnage, Loeb wrote to the board. "This board's unchecked valuedestruction must stop once and for all." He added: "Itseems farcical to us that the Board will most likely spend moretime deliberating over whether Mr. Thompson should be fired than itdid properly vetting whether he should have been hired."(Speaking at a hedge fund conference in Las Vegas Wednesday, Loebpiled on, saying: "They've missed every major trend onthe Internet: social, local, you name it," according to CNBC's Kate Kelly.) ( More : AOL Stock Soars 40% on Billion Dollar Patent Sale to Microsoft ) While Yahoo has been slowly twisting in the wind, AOLvery-pleasantly surprised Wall Street on Wednesday, reportingearnings that topped analyst forecasts. The company said it wouldbe returning to shareholders all of the $1 billion it made in anintellectual property deal with Microsoft. (Microsoft, in turn, isre-selling most of the patents to Facebook, in a kind of strategicgesture of good will ahead of the social network'sforthcoming IPO. Facebook is currently locked in a patent showdown with, you guessed it, Yahoo.) AOL shares rose 3.5% after theresults were announced and Reuters quoted Needham & Co analyst Laura Martin describing the quarter as"awesome." It's been a long time since Wall Street analysts werethrowing the word "awesome" around in reference to AOL.But the company shouldn't celebrate: It still has the loomingproxy battle with Starboard Partners, which could boil over at theannual meeting in June. And it still faces a very steep businesschallenge. As Citigroup's Mark Mahaney wrote Wednesday in anote to clients: "Overall fundamentals remain weak and thereare no signs of market share gains in any of AOL s corebusinesses." But at least it's not dealing with an embarrassing personalethics scandal involving its CEO. As for Yahoo, themis-credentialed Thompson may be able to hang on for a whilelonger, if the controversy dies down. But it's questionablewhether Thompson will ultimately be able to win a war of attritionwith the deep-pocketed Loeb, who appears committed to his ouster. I am an expert from high-voltage-circuit-breaker.com, while we provides the quality product, such as High Voltage Switchgear Manufacturer , China High Voltage Circuit Breaker, Vacuum Contactor,and more.
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