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Scott Thompson Needs to Watch His Swagger

Stocks in this article: YHOO

NEW YORK ( TheStreet) -- There's a fine line between self-confidence and arrogance as a CEO. I think Yahoo!'s (YHOO) Scott Thompson is walking the razor's edge.

It's healthy to be self-confident as a CEO. If you didn't think you could do a good job, you wouldn't get the job in the first place.

If you're arrogant, you think you're smarter than your direct reports and your competitors. That means you probably begin to develop blind spots around strategic decisions you make.

Yahoo! CEO Scott Thompson

Being arrogant as a CEO can be especially dangerous if you're an outsider coming into a new industry -- and yet you still think you're smarter than your management team and the rest of the industry. Then, you make bold decisions, with little input from knowledgeable others, which could really sink your company.

I think it's bonkers, by the way, that Larry Page decided that Google (GOOG) should buy Motorola Mobility (MMI) and then keep that business (as they seem determined to do). They have no idea how different that business is going to be from the ad business and seem destined to make lots of blunders. Time will tell.

Scott Thompson could be at risk of being a little too arrogant in his first 90 days on the job at Yahoo! It's a mistake that Thompson's predecessor, Carol Bartz, made in her first year and she never really lived that down.

It seems like Scott is falling into the same trap.

Consider this:

1. He reportedly insulted a bunch of Yahoo!'s top ad agencies, including Interpublic, last month when he said all Yahoo!'s partners needed to add value.

2. He reportedly inserted himself into the Alibaba discussions and iced them -- at least for the time being. Business Insider said he claimed he knew how to deal with Jack Ma because he'd had some dealings with him before at PayPal.

3. He gave the green light to sue Facebook -- which I agree with by the way.

4. He's put Yahoo! employees on notice that they have to add value.

5. He appears to have blown off Dan Loeb, according to Loeb, with "insouciance" instead of trying to work out a settlement to avoid a proxy battle.

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