Why Did Yahoo Want Max Levchin?

Since her appointment as Chief Executive Officer of Yahoo (NASDAQ:YHOO) in July, Marissa Mayer has made the company’s modernization her focus. As part of her efforts to reverse three consecutive annual sales declines and transform Yahoo into a mobile company, Mayer has launched a new version of the company’s email service and tested a redesigned homepage. Now, under her leadership, eBay’s (NASDAQ:EBAY) PayPal co-founder Max Levchin has joined the company’s executive team.

Who is Max Levchin and Why did Mayer Want Him at Yahoo?

“Yahoo’s latest board changes signal its continued push to become a top technology company once more, a strategy it began in July, when it hired Marissa Mayer away from Google to become its new chief executive,” reported The New York Times on Thursday.

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Levchin, who was described in the company’s press release as a “serial entrepreneur,” is part of a community of American businesspeople and investors who call themselves the PayPal Mafia. This group, as Fortune reported in 2007, have changed the course of Internet history. In particular, Levchin’s credentials are impressive; he served as PayPal’s chief technology officer, where he revolutionized the ecommerce industry, and founded the company Slide, which produced Web applications for Facebook (NASDAQ:FB) before it was acquired by Google (NASDAQ:GOOG) two years ago.

“I’m confident that his strong product and technology expertise will be a tremendous asset to Yahoo! as we work to transform the world’s daily habits,” said Mayer in the press release.

CHEAT SHEET Analysis: Is Levchin a Positive Catalyst for Yahoo’s Stock?

One of the core components of our CHEAT SHEET Investing Framework focuses on catalysts that will move a company’s stock. While it may take quite some time for Levchin’s expertise to be seen in Yahoo’s transformation, his name holds a certain weight in the industry, and this cachet could have a positive effect on the company’s stock, at least over the short term.

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