Bleeding market share, managerial talent and investor confidence, Internet giant Yahoo replaced chief executive Terry Semel yesterday with company co-founder Jerry Yang, who now faces the task of trying to catch up to Google.
When Semel, 64, arrived at Yahoo in 2001 after decades in Hollywood, he was seen as the mature, disciplined manager the company needed to survive the bursting of the Internet bubble. The Beverly Hills, Calif., resident commuted to Yahoo's Northern California headquarters in his private jet and reaped hundreds of millions of dollars in executive pay for stabilizing the company at a delicate time.
But in recent years, Semel and other Yahoo executives found themselves overmatched by the juggernaut they helped create: Google, whose search engine Yahoo promoted until it realized how profitable the younger company had become. As Yahoo faced constant attack in business areas that did not exist or much matter when he took the helm, Semel confided to friends that the job was taking a toll.
"The last couple of years have been tough," said Bob Daly, who ran Warner Bros. movie studio with Semel for 20 years. "The atmosphere is very competitive because of Google, and all of it was just wearing him down."
Wall Street welcomed Semel's departure. Yahoo shares jumped nearly 5 percent in after-hours trading following yesterday's announcement. They had risen 3 percent to $28.12 in regular trading on rumors that he might leave.
But some analysts questioned whether Yahoo could get back on track without an infusion of new talent and ideas in the top ranks. The new management team looks much like the old one.
Semel was named non-executive chairman of the company. The new CEO, Yang, who had held the whimsical title Chief Yahoo, has remained closely involved in the day-to-day operations of the company he founded with David Filo in 1995 while they were Stanford University graduate students.
And Susan L. Decker was promoted from executive vice president to president, in charge of winning more advertisers and Web surfers. Decker, Yahoo's 44-year-old former chief financial officer, is widely believed to be in line for the CEO job after getting some seasoning.
Decker and Yang "were significant players in getting Yahoo in the position it's in today," said Derek Brown, an analyst with Cantor Fitzgerald.
