Yahoo! Replaces CEO Semel with Co-founder Yang
Less than a week after a Yahoo! shareholder meeting blamed CEO Terry Semel for failing to keep the perennial second-ranked Web portal/ search engine abreast of Google, Semel has stepped aside and will let Yahoo! cofounder Jerry Yang take over the company’s leadership.
After six years spent running Yahoo!, Semel announced late Monday that he will move to a newly created post, “non-executive chairman”, while Yang will relinquish his old one (“chief Yahoo!”) to become CEO of the company. Susan Decker, former head of Yahoo!’s publisher and advertising group, will become president.
The changeover had been rumored periodically during the last year of Semel’s tenure, but those rumors grew last week when he and other company officers won re-election with only 66% of the vote. That compared to a 99% vote at last year’s meeting, when Yahoo! seemed poised to grow search market share with the coming rollout of its Panama search platform.
Participating in a conference call after the announcement with both Yang and Decker, Semel said he had been discussing giving up his leadership role at Yahoo! “for quite some time.”
“I’ve long been talking to the board about the importance of insuring a smooth succession in Yahoo! senior leadership, and more recently about the need for a leadership team committed to carrying Yahoo! through its multi-year transformation,” he said.
“The past year has been a difficult one for Yahoo!, and I know that none of us has been satisfied with the company’s recent financial performance,” Semel said. And while the company had laid the foundation for future success with several of its initiatives — most notably the Panama launch, which has made Yahoo! more controllable and more attractive to advertisers — the time for a management switch was “sooner rather than later”, Semel says he told the company’s board.
“This is the right thing to do for Yahoo!, and the right time to do it,” he said.
In the same conference, Yang paid tribute to the financial milestones accomplished during Semel’s tenure since 2001: bringing the company’s revenue from $717 million in 2001 to $6.4 billion last year, boosting its user audience from 170 million to 500 million and creating more than $30 billion in shareholder value. But he also said the company needs to “execute with speed, clarity and discipline” in order to “focus better on what’s important to our users, customers and employees” and attract and retain technical talent.
Decker said the Semel-driven reorganization of Yahoo! into three divisions centered on users, advertisers and publishers, will be revised to integrate the audience and advertiser groups under her direction.
She said that while the Panama launch is on track to produce double-digit increases in revenue per search by the end of the year, slowing growth in display advertising and lower than expected revenue from affiliate search will keep Yahoo!’s second-quarter earnings in the low-to-midpoint range of previous guidance.
Semel’s position at Yahoo!, to which he moved from a post as chairman and co-CEO at Warner Brothers, was thrown into question late last year with the leak of an internal memo known as the “peanut butter manifesto”, suggesting that Yahoo! was spreading itself too thin and failing to compete effectively with Google on any front.
Google earned more revenue last quarter than Yahoo! posted all year and has increased its stock price six fold since going public in August 2004. Yahoo!’s stock price, although triple what it was when Semel took over in May 2001, has dropped to a level a bit lower than before Google’s initial public offering.
