Analysts: Yahoo Management Reshuffle a Good Thing for Company

Yahoo Inc's sweeping out of its chief executive and settling of a proxy fight with an investor open a path for stable growth for the troubled company, analysts said.

On Sunday, Yahoo said its global media head, Ross Levinsohn, will be interim CEO. Levinsohn, who made his name running News Corp's Fox digital business, is often mentioned as a CEO contender.

Scott Thompson was the third CEO Yahoo replaced in as many years. The company also gave three board seats to a hedge fund led by Daniel Loeb.

Analysts were positive about Levinsohn's appointment. His background is seen to be essential for Yahoo to strengthen its media offering and improve its display advertising business.

"While this likely prolongs current turnaround efforts at the company, it may create a more stable and focused organization going forward," said ThinkEquity's Ronald Josey.

Yahoo could avoid a proxy fight and now has a board which will be more proactive and shareholder-friendly, said J.P. Morgan analyst Doug Anmuth.

However, Anmuth said the management shuffle and board changes raised questions about the timing of the possible sale of Yahoo's stake in China's Alibaba Group. A delay there may disappoint short-term investors.

Yahoo shares, which are up 5 percent since Third Point disclosed a stake in the company in September last year, closed at $15.19 on Friday on the Nasdaq.