UDPATE: Jefferies Downgrades Yahoo! to Hold

Jefferies & Company has published a research report on Yahoo! (NASDAQ: YHOO) and has downgraded the company from Buy to Hold citing Scott Thompson's lack of media and turnaround expertise as potential negatives.

In the report, Jefferies writes, "Scott is an impressive manager who proved at Paypal that he can successfully run a fast growing company. That said, he's a technologist, who ascended to the CEO job at Paypal in 2008 after serving as its CTO in charge of information and product development. Prior to Paypal, he was at Inovant, a subsidiary of Visa as VP of Tech solutions, and before that he was at Barclays Global Investors as its CTO. His appointment is somewhat puzzling to us given Yahoo!'s effort in the last few years to become more of “media and content” than a “pure technology” company. Scott's appointment is indicative pehaps of a change of direction for Yahoo! as it tries to "return to the forefront of technology innovation", as Scott explained on the conf. call. This is a costly challenge, especially when competing with Google and Facebook."

Jefferies maintains its $18 price target on Yahoo!, which closed yesterday at $15.78.