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Yahoo’s Ex-Chief Levinsohn Says Turnaround Needs Years

(Corrects references to month in fourth and 11th paragraphs.)

Ross Levinsohn, who was interim chief executive officer of Yahoo! Inc. (YHOO) until Marissa Mayer became CEO in July, said his successor will need years and a patient board to turn around the Web portal.

“You have to give Marissa and the team that’s there the time to finish the job,” Levinsohn said in an interview with Bloomberg West yesterday, his first since stepping down. “You can’t turn that company or any company of size around in six months or a year.”

Levinsohn held the top post at Yahoo less than three months, and had become a candidate to lead the company before the unexpected hiring of Mayer, an executive from Google Inc. (GOOG) tapped to reverse three years of declining revenue at the biggest U.S. Web portal.

Mayer, Yahoo’s fifth CEO in three years, is one of several executives attempting to revive the fortunes of a struggling technology icon, including Meg Whitman at Hewlett-Packard Co. (HPQ) and Tim Armstrong at AOL Inc. (AOL) Whitman said in October that a turnaround at HP will be a multiyear effort.

“Yahoo is a battleship,” Levinsohn said. “To turn a battleship takes a long time, but once you turn that battleship the right way, it’s a battleship, and it can really inflict some damage on an enemy.”

Photographer: David Paul Morris/Bloomberg

Ross Levinsohn, who was interim chief executive officer of Yahoo! Inc. until Marissa Mayer became CEO in July, said his successor will need years and a patient board to turn around the Web portal. Close

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Photographer: David Paul Morris/Bloomberg

Ross Levinsohn, who was interim chief executive officer of Yahoo! Inc. until Marissa Mayer became CEO in July, said his successor will need years and a patient board to turn around the Web portal.

Levinsohn said his departure, announced shortly after Mayer’s appointment, was amicable.

“I felt I took a good run at trying to be CEO,” he said. “It was probably the right thing to move on after I didn’t get it.”

Growth Challenge

Under his brief tenure, Levinsohn resolved a patent dispute with Facebook Inc. (FB) and worked out the final details of a plan for Chinese e-commerce provider Alibaba Group Holding Ltd. to buy back a stake in itself.

Among the responsibilities Levinsohn handed off to Mayer is a search advertising pact with Microsoft Corp. (MSFT), forged in 2009 by another former Yahoo chief, Carol Bartz. Certain terms of the pact are set to expire in April 2013. In the interview, Levinsohn dismissed speculation that Mayer could try to end the partnership in favor of Google, and said he expects Microsoft to be an important ally for Yahoo.

“They’ve made improvements in terms of search query, in terms of ad matching, in terms of innovations, in terms of design,” Levinsohn said. “Marissa comes from a real search background. If they can work hand in hand, it should get better.”

Yahoo is targeting growth as fast as competitors in online search, display advertising, mobile applications and products such as e-mail, Mayer said on her first call with analysts last month. She may find it challenging to grow e-mail, which does not bring in many new users, Levinsohn said.

Signing Up

“There is a lot of pressure in the communication space,” he said. “The absolute numbers over the last couple of years for most companies other than Google, who has the advantage of signing up mail users with starts of Android devices, have been relatively flat to down.”

Levinsohn, a veteran of social-networking service MySpace and search engine AltaVista, said he’s spending more time at his home in Los Angeles and investing in startups while he decides what he wants to do next.

“I’d like to find a place where the people share my interest and passion for changing things.”

To contact the reporters on this story: Jonathan Erlichman in New York at jerlichman1@bloomberg.net; Douglas MacMillan in San Francisco at dmacmillan3@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net

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