Yahoo CEO Exits; Activist Shareholder Added To Board

Yahoo (YHOO) shares rose 2% Monday after the company on Sunday said CEO Scott Thompson has been replaced amid a scandal over a false educational claim on his resume.

The company on Sunday also announced the end of a proxy fight with big shareholder Third Point, the immediate appointment of an interim CEO and the immediate appointment of a new chairman.

Thompson also reportedly has thyroid cancer, which he reportedly had disclosed to the board.

Ross Levinsohn, Yahoo executive vice president and head of global media for the company, is the interim CEO.

Fred Amoroso, who joined Yahoo's board in February, is the new chairman. Amoroso is former CEO of digital entertainment tech company Rovi (ROVI).

The company also named activist shareholder Daniel Loeb, head of Third Point, to the board, along with Loeb allies Harry Wilson and Michael Wolf. Third Point will end its proxy fight against the Web portal, which has struggled to boost revenue vs. more focused rivals such as Google (GOOG) and Facebook.

Two week ago, Loeb revealed that Thompson didn't have accounting and computer science bachelor's degrees from Stonehill College, as stated in his bio. Thompson last week said, via Yahoo, that he had only an accounting degree.

The Pirate Bay Opposed Attacks on Virgin Media

Virgin Media has been applying blocking measures against The Pirate Bay after being ordered to do so by the British court. In response, file-sharers threatened the Internet service provider with DDoS attacks and protests at its headquarters.

A couple days ago The Pirate Bay started criticizing the Anonymous for DDoSing Virgin Media’s official site, saying that this action may be regarded as a form of censorship. The BitTorrent tracker claimed they didn’t encourage such actions, because it believes in the open and free web, where anyone can express their opinion.

The DDoS attack was started last Tuesday, and the ISP confirmed this fact, adding that they took the website offline themselves. The same day @AnonUK Twitter feed said that the Anonymous claimed responsibility for taking down Virgin Media site. In reply, The Pirate Bay asked their supporters to stop using such methods, because both DDoS and blocks are forms of censorship.

Famous BitTorrent tracker urged people to instead do something else – start a tracker, join a pirate party, set up a proxy, or come up with a new peer-to-peer protocol, as all this would be more useful than DDoS attacks. Meanwhile, Twitter users noticed that Virgin Media, as well as other broadband providers, originally refused to block The Pirate Bay and are now only following the law.

However, a faction of Anonymous calling itself @AnonAteam on Twitter was quick to claim responsibility and defend the attack, arguing that they weren’t just about facilitating access to the BitTorrent tracker, but intended to stop the type of order used to block the site being used as a precedent for further online filtering.

The Anonymous announced that the entire reason for the protest was to protect online freedom of expression from being blocked without any form of judicial process. The Internet service providers play the role of gateways to democracy in our technology age, and blocking access to the sites with such an abuse of the legal process should be treated as illegal and an abuse of power.

Recently, a group named the People Liberation Front strongly condemned the attack on Virgin Media and other British Internet service providers because it violates the 2nd principle of the hacktivists: “never attack infrastructure”.

Romanian “Witches” Googled the Future

A couple of fortune tellers managed to convince many of their clients that they knew everything about them after searching the data on Google and Facebook. Then they pretended to see all of this in their crystal ball.

International media reported that two of Romania’s top witches had made a fortune by providing spells helping to protect clients from the devil. People thought they had the magical ability to know everything about the others through their crystal ball and the fact that dead people seemed to be in breach of any privacy policy.

Nevertheless, what the witched really did was use surveillance equipment in order to collect information on their clients. Later they would pretend that this data was transmitted to them from the spirit world. The witches spied on their clients and did plenty of Google and Facebook searches, after which they plugged in their crystal ball and told the customers what they had been doing for the last 24 hours.

Persuaded, the victims agreed to pay huge amount of money for the chance to speak to dead relatives and get protection from evil forces, believing that the Romanian women were real mystics. One of their clients was even persuaded to take thousands of pounds and go to a lake for a midnight ritual in order to release herself from the burden of her money by throwing it all into the lake. However, the woman hesitated, and a demon emerged from the water of that lake. Of course, she flung all the money into the water and ran away. Later, the country’s police found out that the demon was actually a friend of the fortune tellers who had put on diving gear and a mask in order to terrify the unsuspecting victim and make her fling the cash.

The entire scheme failed when the fortune tellers were charged with fraud and decided to bribe a local prosecutor to drop the charges. Nevertheless, the police seemed to have their own Tarot cards and predicted this could happen: in fact, the prosecutor in question was under suspicion for dropping too many cases recently. Instead of summoning a demon to watch the prosecutor, the police simply bugged his office and in result arrested all three of them.

The cops pointed out that if the “witches” had been any good they would have known that the prosecutor’s office was bugged. Aside from fraud, the fortune tellers also face charges under the National Security Act for using unauthorized surveillance equipment.

Yahoo a rare gainer as most techs retreat

Technology stocks fell Monday, mirroring a broad-market selloff, though Yahoo Inc. managed some gains after the latest drama in its executive suite.

Yahoo CEO Scott Thompson resigned Sunday, just four months into his tenure at Yahoo, following a controversy over inaccuracies in his academic biography. At issue was Thompson claiming he had a bachelor’s degree from Stonehill College in accounting and computer science; Thompson’s degree was only in accounting. Ross Levinsohn, who ran Yahoo’s media business, was named the company’s interim CEO.

Yahoo YHOO +2.04%  shares were among the few notable gainers by the time the market closed, rising 2%, to $15.50.

But most other tech stocks retreated, and the Nasdaq Composite Index COMP -1.06% closed with a loss of 31 points at 2,902. The Philadelphia Semiconductor IndexSOX -1.09%  shed 1%, and the Morgan Stanley High Tech 35 Index MSH -0.77%  was off by almost 1% `^"|^` 

The broader market declined — with the S&P 500 off more than 1% — following a slate of uncertainty from Europe, including the latest political and economic upheavals in Greece and the fallout from J.P. Morgan JPM -3.17% reporting a trading loss of $2 billion last week. 

Among leading tech stocks, losses came from Apple Inc. AAPL -1.50% , Hewlett-Packard Co. HPQ -0.80% , Amazon.comAMZN -2.09% , Microsoft MSFT -1.54%  and Intel INTC -2.23%  .

Daily-deal company Groupon Inc. GRPN +18.54% , jumped 18.5% to close at $11.74. Groupon is scheduled to report its quarterly results after Monday’s market close. 

BMC Software Inc. BMC +8.71%  saw its shares rise $3.52, or 8.7%, to $43.92. The business-software company adopted a shareholder rights plan to fend off a proxy fight by hedge fund Elliot Associates LP. Elliot, which owns more than 5% of BMC’s stock, has called for a sale of the company.

Yahoo reboots: New board members, interim CEO

Yahoo became embroiled in the résumé flap when activist shareholder Third Point, which holds a 5.8% stake, disputed Thompson's résumé. Third Point CEO Daniel Loeb said the résumé inaccurately claimed Thompson held a degree in computer science, calling into question the Yahoo CEO as well as hiring committee head Patti Hart. Yahoo acknowledged the inaccuracy and bowed to pressure from Third Point to review the matter.

The fallout comes as Third Point had increased demands for Thompson's removal and a board makeover. Under the shake-up, Yahoo has relented to Loeb's demands for placement of Third Point members on the Yahoo board. Third Point board nominees Loeb, Harry Wilson and Michael Wolfwill join Yahoo's board, effective Wednesday.

Non-executive chairman Roy Bostock, along with Hart, VJ Joshi, Arthur Kern, Gary Wilsonand Thompson, all agreed to step down from the board immediately.

"The board believes in the strength of the company's business and assets, and in the opportunities before us," Amoroso said in a statement.

The résumé flap is the latest black eye for Yahoo, which has been under pressure from shareholders to reshape itself amid a withering assault from Google and Facebook.

"It's very damaging, and speaks so negatively to the (vetting process)," says Adam Hanft, an expert in management and brand strategy. "(Thompson) was hired for strategy, branding and marketing — not computer science."

The January hiring of Thompson, the highly successful CEO of eBay's PayPal unit, was Yahoo's latest stab at a turnaround. But his padded credentials raised questions about his integrity and the Internet pioneer's hiring and vetting process.

Thompson's hasty exit complicates a restructuring plan he put into place that includes 2,000 layoffs. It's just the latest in a series of missteps and stumbles in the past few years highlighted by multiple CEOs, executive defections, reorganizations and questions about deals with tech partners Microsoft and Alibaba.

For Levinsohn, it all adds up to inheriting a wayward ship with a reconstituted board and uncertain future. "Who in their right mind would take this job, and this board?" longtime tech analyst Jonathan Yarmis says. "We should have fun and answer that question: 'Who's crazy enough?' "

Yahoo confirms CEO is out after resume scandal

Yahoo CEO Scott Thompson is out after it was found he padded his resume with an embellished college degree, ending his term at the company after just four months.

Yahoo confirmed Thompson "has left the company" in a statement posted late Sunday, after two news reports. Tech blog AllThingsD was the first to report the news, and the New York Times followed up with its own article.

Yahoo media chief Ross Levinsohn will be named interim CEO, the company said. Levinsohn had earlier been rumored as a successor to Carol Bartz, who was fired from Yahoo by phone in September. Instead, Thompson took the CEO role in January.

Thompson's resume scandal ignited just over a week ago, when activist shareholder group Third Pointalleged that Thompson lied about details of his college degree.

The saga took an even more dramatic twist Monday morning, when theWall Street Journal reported that Thompson has been diagnosed with thyroid cancer. His decision to step down from Yahoo was "in part influenced" by the recent diagnosis, the newspaper said.

New board members: Dan Loeb, the CEO of Third Point, has a long history of launching proxy fights -- and Yahoo was the latest company in his crosshairs. Third Point owns about 5.8% of Yahoo, and is the largest outside shareholder. In February, Third Point filed paperwork proposing four new Yahoo board members, including Loeb himself.

At first, Yahoo didn't want to play ball. But Third Point scored a coup by finding and exposing Thompson's padded resume.

Now, Yahoo has settled with Loeb to end the proxy fight. On Sunday, Yahoo and Third Point released a joint statement explaining the terms.

Yahoo will add three of Third Point's proposed nominees to the board: Loeb himself; Harry Wilson, the CEO of corporate restructuring and turnaround firm Maeva; and Michael Wolf, CEO of media consulting company Activate.

The fourth Third Point-proposed nominee, former NBC Universal CEO Jeffrey Zucker, said in the companies' statement that he removed himself from consideration in order to more easily broker a settlement.

Loeb said in the statement Sunday that he, Wilson and Wolf are "committed to working with new leadership to unlock Yahoo's significant potential and value."

In addition, Yahoo said Sunday that it named Fred Amoroso, an existing board member, as chairman. The chairman position had been in play since a February board shakeup that wiped out most of Yahoo's previous directors.

In an internal Yahoo e-mail obtained by CNN's Dan Simon, interim CEO Levinsohn acknowledged the "very bumpy road we've traveled."

But, he said, Sunday's announcements "lay to rest the unfortunate and serious distractions surrounding our senior leadership and the composition of our Board going forward."

Levinsohn closed the e-mail by saying Yahoo will "go on the offensive starting today."

Representatives from both Yahoo and Third Point declined to comment beyond the joint statement.

False statements: Thompson's published Yahoo bios -- including the one in the company's latest annual report, a legal document that CEOs must personally swear are truthful -- have claimed that he holds a bachelor's degree in both accounting and computer science from Stonehill College. His degree is actually in accounting only.

Yahoo (YHOO, Fortune 500) called the mistake an "inadvertent error." The board said this week that it had hired outside counsel to conduct a review of the false statement. Soon after, the director who led Yahoo's CEO search committee, Patti Hart, announced that she would step down at the end of her current term.

False statements about Thompson's degree stretch beyond his time at Yahoo, which began in January. References to a "computer science" degree also appeared in his online biographical information on PayPal's website when Thompson was president of the eBay (EBAY, Fortune 500) subsidiary.

Thompson's degree information is listed accurately in eBay's regulatory filings and in the bio featured in filings for F5 (FFIV), where he serves as a director. In both cases, the companies state: "Mr. Thompson holds a B.S. in Accounting from Stonehill College," with no reference to a computer science degree.

But the false statement about his degree appeared in Yahoo's latest annual report filed to the SEC: "Mr. Thompson holds a Bachelor's degree in accounting and computer science from Stonehill College."

Those errant three words could mean big trouble for Thompson and Yahoo. CEOs are required to personally certify that their company's SEC filings are accurate. 

Gas Pipeline Hacks

The US Department of Homeland Security announced that gas pipelines have been targeted by hackers. This raised the fears over the safety of infrastructure.

The Industrial Control Systems Cyber Emergency Response Team (ICS-CERT) has recently highlighted a series of cyber attacks targeting natural gas pipeline sector corporations. They analyzed the malware related to the hacker attacks and discovered that it has identified the attacks as a part of a single campaign which is believed to be ongoing since last December.
Spear-phishing cyber attacks have targeted employees within companies, but some of the individuals targeted have been “tightly focused” apparently. The hackers conducted their attacks by sending emails which seemed to have been sent from a trusted member of the company they worked for.
ICS-CERT has already issued a warning to highlight the danger represented by cyber attacks on infrastructure. However, the information being made publicly available is very limited. The outfit claims that it’s currently “working aggressively” with targeted companies to fend off threats and to prevent re-infection. Meanwhile, they didn’t provide any source of motive of the intrusions.
Nowadays, cyber attacks on critical infrastructure are a growing concern, especially in the wake of the Stuxnet worm which threatened nuclear power stations in Iran. Indeed, a lot of power companies are actually open to attacks like spear phishing because of having low levels of security infrastructure in place. On the other hand, other corporations in the space have complex security solutions able to resist very determined attackers.
However, some of the industry observers believe that the seriousness in the cases might be overstated, and it isn’t only critical infrastructure on the receiving end of attacks, but attacks like Stuxnet will inevitably cause concern.
Last time in the United Stated, an incident originally labeled “a cyber attack on critical infrastructure from Russia” months later turned out to be an authorized action taken by a person on holiday in the US. Sometimes, correlating incidents taken against important companies, including viruses, spear phishing and hacker attacks, called “sophisticated hacker attacks” may appear a dangerous ploy, because these networks mostly have the same level of incidents and abuse as any other industry.