Ailing internet giant Yahoo was thrown into fresh crisis last night as chief executive Scott Thompson agreed to step down after controversy erupted over a fake computer science qualification.
Thompson, pictured, who was only poached from PayPal in January, is expected to be replaced by Yahoo's global media head Ross Levinson on an interim basis.
Thompson's exit is a victory for Daniel Loeb, the hedge fund manager who discovered the discrepancy. He has been harrying Yahoo's board to demand major changes, including seats on the board, which he is now expected to be granted.
Yahoo acknowledged an "inadvertent error" in the boss's biography but claims that he lied on his CV by inventing a degree qualification that his university never offered meant the scandal grew. It was the last thing Yahoo needed as uncertainty over its future has already driven the shares down by a fifth over the last year. Thompson was brought in after former boss Carol Bartz was fired for failing to jump-start strategy. He set about slimming Yahoo by cutting thousands of jobs.
Jerry Yang, Yahoo's founder, announced his departure in January, paving the way for a shake-up or sale of the business which was long ago eclipsed by Google and Facebook.
Loeb declared last week that he would launch a legal action against the company if Thompson remained in his post. "Chief executives have been terminated for less at other companies," he wrote in a letter to Yahoo's board.