Next up, Levinsohn

Yahoo needs more than a revolution at the top. The dysfunctional internet firm is much like a failing country. It has been mismanaged and suffers from bureaucracy and an increasingly uncompetitive business model. It even had, until recently, a dictator for life in founder Jerry Yang. Third Point’s successful shareholder revolt promises a fresh start, but fixing Yahoo won’t be simple. The firm is plagued by many ills.

To be sure, the $18.5-billion group can now try to move on after the departure of chief executive Scott Thompson, who admitted to embellishing his resume with a non-existent computer science degree and is also reported to be suffering from cancer. Moreover, there’s finally promise that Yahoo may address a core problem: its complacent board. It is replacing its chairman, too, and three directors including Third Point chief Dan Loeb will join the board.

Interim CEO Ross Levinsohn can likely reverse many of the changes sought under the short reign of his predecessor Thompson. A radical about-face would see the former head of News Corporation’s Fox digital arm focus on Yahoo’s media business instead of pushing into transactions and ambiguous fee-generating services.

But reinvigorating Yahoo won’t be easy. The firm has had five CEOs over the past five years, and largely missed the social and mobile revolutions overwhelming the Internet. Many of its best employees have emigrated to greener pastures elsewhere. This changing of the guard gives Yahoo a fresh start, but it will be a long, hard march back to relevance.