The CEO of Yahoo! sensationally quit at the weekend over errors in his resume. Scott Thompson, 54, had been less than five months in the new job , having been wooed from Paypal.
The flawed biography of Thompson , in a regulatory filing, had been a "major embarrassment for the ailing Internet company" said the Wall Street Journal.
The new Interim-CEO is Ross Levinsohn, Yahoo's global media chief. The job could be made permanent, insiders believe.
Another big change: Fred Amoroso is now chairman of the board, replacing Roy Bostock, who is resigning.
Thompson's resignation was a big victory for Yahoo's largest outside investor, hedge fund Third Point LLC - which has now won three seats on the board.
The embattled CEO agreed to resign after the company's board obtained evidence that contradicted his claim of innocence about his misstated academic record, said the WSJ, quoting "people familiar with the matter."
An executive-search firm provided Yahoo with information that appeared to show Thompson years ago had knowingly claimed to have a computer science degree from Stonehill College in Massachusetts . The college wasn't running the course when he was there and he left it with an accounting degree.
Thompson, the fourth Yahoo CEO to step down in five years, had been lured to Yahoo! in January from his previous job as president of PayPal
He had told Yahoo colleagues that he wasn't responsible for the misstatements about his academic record. He couldn't be reached for comment Sunday.
Yahoo's board is also said to be looking into whether it could fire Thompson "with cause," meaning he would lose out on millions of dollars in severance pay.
Third Point revealed Thompson's inaccurate academic record earlier this month.
Yahoo's board said it would give the hedge fund, which has 6% of the company's shares, three board seats to end a proxy fight. The firm originally sought four seats.
Third Point's leader, Dan Loeb, will join the board along with restructuring specialist Harry Wilson and media-company consultant Michael J. Wolf. The Wall Street Journal, quoting a source said Yahoo's many troubles made a negotiated settlement "so important."Giving Third Point three board seats represents "a coming together of owners: it's a peace pact."
Thompson, a former president of eBay's PayPal unit, was hired after a four-month search to succeed Carol Bartz who had been fired .
The degree controversy began on May 3, when Third Point sent a letter to Yahoo's board pointing out the error in a recent Yahoo regulatory filing. That filing, in late April, included a short biography of Thompson saying he had obtained a bachelor's degree in computer science and accounting.
Yahoo originally said the misstatement was an "inadvertent error." Thompson said he had no knowledge of it until it was pointed out by Third Point in early May.
Last week week, Yahoo was said "not to want to get rid of Scott Thompson,'' partly because "they felt it would be too disruptive to the company to change CEOs."
Then Thompson told fellow Yahoo employees that a search-firm employee had altered biographical material about him that was originally submitted to PayPal.
The Heidrick search firm sent employees a strongly worded letter on Friday denying Thompson's allegations that a junior Heidrick staffer had done so.
"Based on information in our possession, this allegation is verifiably not true and we have notified Yahoo to that effect,'' said the search firm.