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Yahoo has named Scott Thompson- the president of online payments firm Paypal, as its new CEO.He will fill the vacancy left by Carol Bartz, who was dismissed as chief executive in September after failing to turn around the company’s fortunes.

Mr Thompson has headed Paypal, the payments division of eBay, since 2008, during which time its userbase doubled.

Yahoo is currently undergoing a strategic review as it has failed to keep up with rivals such as Google.

First and foremost Mr Thompson has to define what Yahoo should be. Technology firm? Media company? Online services provider? Search engine? Internet portal? All of the above?

Yahoo has spread itself too thin, both managerially and technologically. It tried to compete with Microsoft, Google, AOL and everybody else at the same time – and failed. Yahoo is not known for innovation anymore. Meanwhile, Facebook snuck up from behind and ate Yahoo’s most valuable asset – the time its users spend online.

Selling troubled Yahoo to some naive investor might be an option, but anti-trust challenges make the outcome of any bid doubtful – unless Yahoo’s Chinese partner Alibaba steps forward. But that in itself would be a political Pandora’s box.

The US firm’s key products, beside its search engine, include photo sharing site Flickr and its webmail platform.

However, its domination of webmail – and the ancillary services it offers its email account holders – is under threat as younger users migrate to social media sites such as Facebook and Twitter.

Markets gave the news a cool reception. Shares in Yahoo were down 3.1% at the close of trading in New York.

Shares in Paypal’s parent, eBay, closed down 3.77%. The broader Nasdaq tech index closed up 0.33%.

Yahoo’s share price has stagnated at about $15 ever since late 2008, refusing to go above $20, after it rejected an offer from Microsoft to buy up the company at $33 a share.

Revenues at the firm have stagnated, particularly compared with leading search engine Google, and Yahoo has had to lay off workers four times over the past three years.

The poor performance prompted Yahoo’s board to ignominiously turf out Carol Bartz in September last year.

Tim Morse, who had been standing in as chief executive, will return to the role of chief financial officer when Mr Thompson takes over on 9 January.

Online auction company eBay has reported better than expected profits thanks mainly to growth at its PayPal division.
Second quarter net income was £176 million, down from £257 million for the same period a year ago.

But the fall in earnings was largely due to eBay’s takeover of GSI Commerce, a digital marketing and ecommerce firm, earlier this year.

Ebay’s main online Marketplace business showed signs of a turnaround and its PayPal division grew well.

PayPal gained members and the value of merchandise sold through its eBay.com website rose.

Taking out one-off cost – including those of acquiring GSI – income was 19% higher than last year’s £331 million.

However after eBay increased their charges in May there was a considerable backlash from UK etailers- some of whom claim that eBay’s new charges make them unprofitable.

These higher charges are making them switch from eBay to Amazon- who has kept their UK charges flat.

The EBAY share price still trades at a discount to it’s record price set on 1st October 2007 of $39.90.

Online auction bidders have been given a “wake-up call” after a trader was guilty for bidding against himself to raise prices on Ebay.

Trading standards officers warn it is illegal to push up a price artificially by bidding against yourself or by getting family or friends to do so.

The process is known as shill bidding and breaks new European Union fair trading rules. Offences carry a maximum fine of £5,000 in UK law.

Minibus hire firm boss Paul Barrett, 39, from Stanley, County Durham, pleaded guilty to 10 offences at Skipton Magistrates’ Court after using two separate eBay accounts to bid on and increase the prices of his own items.

He told the court he was unaware that bidding on his own items, including a pie- and pasty-warmer, was against the law. The case was adjourned for sentencing at Bradford Crown Court on 21 May.

Claire McKinley, trading standards officer, told the court: “Mr Barrett placed bids on items he himself owned to raise the price and left positive feedback on his own eBay site, leading buyers to believe his reputation was better than was the case.”

Jo Boutflower, of North Yorkshire Trading Standards, said: “I think people do it either themselves or by getting friends and family to bid on their items and do not think they are doing anything wrong, but actually they are breaking the law.

“We certainly hope this case is a bit of a wake-up call to people who do trade on eBay, or other auction sites.”

Speaking after the hearing on 16 April, Vanessa Canzini of eBay said: “Shill bidding is illegal and it is important for people to understand that there is not, nor has there ever been, room for illegal activity on our site.

“We invest over £6m each year in state of the art technology to detect shill bidding and other illegal activities.

“This acts as a strong deterrent to the small minority who attempt to use our site inappropriately but, more than this, it helps us to work with law enforcement agencies to secure successful prosecutions if anyone decides to try their luck.”