There have been several reports in the past day or so saying that Akamai (AKAM) President and Yahoo! (YHOO) board member David Kenny wants to be the next Yahoo! CEO.
This is a bad idea.
Kenny has been cited in the media as a good pick for a Yahoo! CEO because he's been a Yahoo! client while at Digitas, he knows Yahoo! from being a director in the last year, and from working at a private-equity-owned company (suggesting he knows how to deliver results for short-term-oriented investors).
Here's my problem with Kenny.
Since taking over running Akamai in December 2007, Akamai's stock price is down 44% while the Nasdaq is down 5%. Just this year alone, Akamai is down 55% while the market is down 5%.
To me, if it's true that Kenny wants out of Akamai to jump to Yahoo!, I can see why that's good for him personally, but it's not good for Akamai or Yahoo! Call me crazy, but it doesn't seem like Kenny's work is complete at Akamai.
If I were on the Yahoo! board, I would want to know why exactly Kenny hasn't been successful at Akamai and why he thinks he would be successful at Yahoo!
If you're a board member at Yahoo! and you're coming off 2.5 years of walking around in the wilderness with Carol Bartz, how do you think that you'll be able to justify picking Kenny and risking another 2.5-year road trip?
Kenny is also reportedly leading the next CEO search. I have a hard time with a guy leading a search committee -- who reportedly hasn't even hired an executive search firm -- suddenly deciding that he's the guy for the top job. Aside from Dick Cheney, that just doesn't happen.
I don't have anything against Kenny. I can understand that people look at his background, and look at him on the board of directors, and conclude that he would be a good pick. But, I would say that Yahoo! is at a critical moment right now.
The Bartz experiment was a failure. I don't think that a star CEO is always needed, but Yahoo! needs a transformational star CEO at the moment.
The company is so cheap -- as I've documented elsewhere -- that investors have clearly voted with their feet over the years.
Hiring a Kenny would do nothing to excite Wall Street. There probably would be a decline in the stock because people would assume this board didn't get it and isn't open to a sale of part or all of the company.
There would be a similar reaction if Yahoo! hired a Kevin Johnson-type of guy -- the CEO of Juniper (JNPR) -- or someone of that type of background.
Yahoo needs to hire a CEO who will totally revamp the board to get Wall Street back. Essentially the board has to hire a CEO who will fire them.
If they don't, it could be three more years of pain for Yahoo! shareholders.