Yahoo’s Ross Levinsohn is CEO frontrunner after Facebook pact

Ross Levinsohn is looking more and more like Yahoo’s golden boy.

He personally negotiated an end to the patent warfare with Facebook, walking away with no cash but a strategic agreement that could boost Yahoo’s flagging fortunes. The deal was officially announced Friday.

The peace pact with Facebook signed and sealed, Levinsohn is now the frontrunner for the top job at Yahoo, said a person familiar with the discussions but not authorized to speak about it publicly.

Levinsohn ended the hostilities that then-Chief Executive Scott Thompson started in March, alleging that Facebook was infringing on Yahoo patents. Facebook countersued, saying Yahoo was after “litigation over innovation.”

Yahoo’s lawsuit came two months before Facebook’s stock market debut and was roundly criticized in Silicon Valley as opportunistic. Thompson was looking to fill Yahoo’s coffers and to turn around his company. In 2003, Yahoo bought search advertising company Overture, which had sued Google over patents. Yahoo settled the lawsuit the following year for 2.7 million shares of Google before Google went public.

Levinsohn took over for Thompson on an interim basis in May, and reached out to Facebook’s Chief Operating Officer Sheryl Sandberg to make peace.

Now Facebook and Yahoo are striking a friendly tone and, rather than wage war, have promised to forge a deep advertising and licensing partnership.
“I’m pleased that we were able to resolve this in a positive manner and look forward to partnering closely with Ross and the leadership at Yahoo,” Sandberg said.

Thompson resigned amid pressure from investors in May after inaccuracies were discovered in his corporate biography.

Yahoo has been in a state of nearly constant turmoil since it rejected Microsoft’s $44-billion takeover offer in 2008. It’s looking to reestablish itself as a leader in digital advertising as newcomers such as Facebook and Twitter siphon away advertising dollars.

Levinsohn is now spearheading that effort. As my colleague Dawn Chmielewski points out, Levinsohn is a seasoned media veteran with “deep ties to the major entertainment companies and to advertisers, and has articulated a vision for Yahoo as a digital media company.”

The other leading contender for the job, Hulu’s Jason Kilar, has taken himself out of the running. A Yahoo spokeswoman declined to comment on the hunt for a new CEO.

Yahoo’s board plans to meet next Wednesday, according to CNBC. The company’s annual shareholder meeting will be held the next day.

On Friday, Facebook shares rose 0.8% to close at $31.73. Yahoo shares fell 0.4% to $15.78.

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