Levinsohn leaves Mayer’s Yahoo: ‘time for next challenge’

Nothing says it’s time for the next challenge like being passed over for CEO twice in a matter of months, especially in favor of people with very different skill sets. As expected, faced by just that — and by a board that has a tech-centric view of Yahoo(s YHOO) — Ross Levinsohn has negotiated his exit after nearly two years. Levinsohn was left hanging when the board opted for Google product vet Marissa Mayer as CEO earlier this month; some held out hope that he might stay, particularly given that media is not part of Mayer’s expertise, but that was unlikely from the start.
Levinsohn is leaving with some lucrative parting gifts under a separation agreement filed with the SEC after the market closed Monday, two weeks after Mayer’s signing as CEO was announced. His official last day at Yahoo is July 31. The two-part package includes a July 26th equity award of 67,000 restricted stock units — worth more than $1 million at Monday’s close –and 250,000 stock options (priced at last Friday’s close — $15.80 per share); the “termination without cause” award accelerates vesting of that award and any other equity or options that would have vested in the next 12 months. He also gets a cash severance equal to his 2012 salary, his full 2012 target bonus, a portion of his 2013 target bonus and health care payments for a year. The agreement includes a mutual five-year non-disparagement clause.
Levinsohn is credited with recharging Yahoo’s media business and upgrading the view from Madison Avenue. He stepped in as interim CEO in May when Scott Thompson was ousted for claiming a degree he didn’t have, and undid the damage Thompson wreaked when he sued Facebook (s fb) over patents, instead settling the patent issue and forging a broader content deal with the social network. His departure was reported first by Kara Swisher.
Here’s what he had to say in a brief farewell note:

“It has been an incredible journey for me and I could not be prouder of what we accomplished over the past few years helping define Yahoo as a leader in digital media and advertising. Yahoo is an amazing brand and company, and I leave knowing we did all we could to help inform and entertain more than 700 million users each month. Leading this company has been one of the best experiences of my career, but it is time for me to look for the next challenge.”

Levinsohn was passed over in favor of PayPal exec Thompson to replace Carol Bartz, the CEO who hired him in late 2012 to revamp Yahoo’s media presence. He was thought to have the best shot at CEO this time around, especially after the Yahoo board allowed him to undo much of Thompson’s reorganization — and to hire Michael Barrett as chief revenue office and others while promoting some high-level execs. I’ve heard some criticism of Levinsohn for hiring too many former colleagues from his time at Fox Interactive Media, among them Barrett, Mickie Rosen, his media lieutenant who moved to lead while he was interim CEO, and Jim Heckman, svp of strategy and emerging businesses. But there’s also concern over a drain of talent and knowledge when it comes to media and advertising. Levinsohn and Rosen forged a number of high-profile deals, including original programming with Tom Hanks and others, an expanded relationship with ABC News and a financial news pact with CNBC. The future of that strategy is unclear.
On the advertising side, personnel changes could undo the progress that was starting to show up in display advertising. Levinsohn’s team spearheaded a ad sales alliance with Microsoft and AOL that is still in the early stages; that could wind up derailed.
What’s next for Levinsohn? Even though he was passed over again, it helps that it was for Mayer — not for someone in his own area. His stint as interim CEO gave people a chance to see him deal with some high-profile problems; he led the shareholders’ Q&A at the annual meeting. In the end, his vision of a media-tech company didn’t match the board’s — and, while hiring him would have been a perfectly fine choice, hiring Mayer brought a star to Yahoo and a PR statement he couldn’t match.
Levinsohn is sure to be on the shortlist of nearly every major media job. One rumor cropping up: Levinsohn to fill the CEO gap at the New York Times Co.(s NYT) He was on the board of Freedom Communications, fits the digital bill NYTCo Chairman Arthur Sulzberger Jr. has stressed (although he’s no Eric Schmidt) and knows media. Do I see it happening? It would be a shocker — but it’s an example of what we’re going to hear until Levinsohn shows up at his next stop.
Another possibility — although I’m not sure why he would want it — running Hulu(s DIS)(s NWSA)(s CMCSK) after Jason Kilar makes his exit. The Santa Monica video portal is close to home, he helped conceive the idea that became Hulu and he was behind the notion of Yahoo as a possible buyer when it was for sale last year.
In the meantime, he’s leaving with more than enough money to take a break and think it through.