• by Mark Walsh  @markfwal, May 13, 2012

Yahoo confirmed Sunday that CEO Scott Thompson is stepping down amid the controversy that erupted when it was revealed that his resume and a regulatory filing exaggerated his academic credentials.

Ross Levinsohn, the company’s global media head, has been appointed as interim CEO. Fred Amoroso was also named as Yahoo’s nonexecutive chairman, replacing Roy Bostock. Yahoo is awarding three board seats to major investor Third Point to settle its proxy fight with the hedge fund, which holds nearly 6% of the company’s stock.

It was Third Point CEO Daniel Loeb who exposed the inaccuracy in Thompson’s bio that included a computer sciences degree he never received. In addition to Loeb, media company consultant Michael J. Wolf and restructuring specialist Harry Wilson will join the board.

Former NBC Universal CEO Jeff Zucker, who had also been on Third Point’s proposed slate, however, said he will not join the board. The five current directors, who were to leave at the company’s annual meeting this summer, will do so immediately. The blog AllThingsD first reported Thompson’s ouster.

Yahoo did not elaborate on the reasons for Thompson’s departure, saying only that he has “left the company” in its statement Sunday. The Wall Street Journal reported the company is continuing its investigation of Thompson’s hiring to determine whether it can fire him for cause, which would allow it to avoid paying out millions in severance money.

Yahoo last Tuesday named a three-person committee led by Amoroso to conduct a “thorough review of Thompson’s academic credentials." It also announced last week that outside board member Patti Hart, who headed the search that led to Thompson’s hiring, would not stand for reelection this summer.

“The Board believes in the strength of the Company's business and assets, and in the opportunities before us, and I am honored to work closely with my fellow directors and Ross to continue to drive Yahoo! forward," said Amoroso in a statement.

When Third Point brought Thompson’s fake degree to light just over a week ago, Yahoo initially called the misrepresentation as an “inadvertent error” before pledging to investigate the matter under mounting pressure from Loeb.

The error in Thompson’s bio, included in a Yahoo regulatory filing in late April, said he had earned a bachelor’s degree in computer science and accounting from Stonehill College. But the school confirmed he had only received the accounting degree.

The inaccuracy in Thompson’s resume had appeared periodically in his public record for years, including while was president of eBay unit PayPal before joining Yahoo in January. Previous regulatory filings by eBay, however, listed only his accounting degree in biographical material.

Thompson last week issued an apology to Yahoo employees for the distraction caused by the resume flap in a memo, while reportedly telling board members he had no knowledge of the error until it was brought up by Third Point. The Journal said the board obtained evidence over the weekend to contradict that claim.

His exit will end the immediate crisis. But Thompson’s botched hiring is only the latest setback for the Web portal as it seeks to keep pace with competitors like Google and Facebook. During his four-month tenure, Thompson’s main effort toward a turnaround was the layoff of about 2,000 employees, or about 14% of its workforce.

Levinsohn, who joined Yahoo in late 2010 as head of media and ad sales for the Americas, is an Internet media veteran. In addition to having served as president of News Corp.’s Fox Interactive Media, he has held management positions at AltaVista, Sportsline and HBO.

Yahoo said Levinsohn would manage the company’s day-to-day operations with assistance from the company’s existing senior leadership. Among the immediate issues facing the interim CEO is restoring morale at the embattled Web portal, which has suffered as a result of the uncertainty surrounding Thompson's status.  He will also have to take over Yahoo's negotiations to sell its 40% stake in China-based Alibaba, estimated to be worth $11 billion.

For its part, Madison Avenue may welcome a familiar media figure like Levinsohn leading Yahoo again after being headed by executives in Thompson and predecessor Carol Bartz, who joined from technology companies. Whether he can return Yahoo to days of strong growth with Facebook eating into its display ad dollars is another question.

“We have found advertisers and marketers to be generally indifferent rather than ambivalent towards Yahoo as a media owner. For durable growth to return, advertisers and marketers must by and large 'love’ Yahoo or find that they can’t otherwise do without it,” wrote Brian Wieser of Pivotal Research Group, in a research note Sunday on Thompson’s departure.