Yahoo! (YHOO) Needs to Show Semel the Door
Shareholder groups are becoming more activist and this trend will continue in 2007. Private Equity and LBO Groups can only acquire so many companies, and there are only so many candidates that can run behemoths. The best way to see change is right at the top in many cases and there is a slew of US public companies that would do far better if they could replace current management. These aren’t in any ranked order, so the first isn’t the worst and the last isn’t the best of the worst. The problem in stating this is that it is very easy to come in and criticize, yet finding replacements for companies this size is not exactly an easy feat. Private Equity as a sector has taken all the talented guys, and they haven’t stopped with the age limits that many public companies live by. There just aren’t too many Lou Gerstner and Jack Welch carbon copies out there.
Yahoo! (YHOO) would be doing itself a favor to just go ahead and get rid of Terry Semel. The company probably isn’t in as bad of shape as the media keeps swinging around, but the truth is that Wall Street wants him to go. Even if they just eliminated him and replaced him with Sue Decker and nothing else the street would react positively. We already saw that signaled back in the last management shuffle, and the board just needs to bite the bullet here and call it a day. Maybe a movie guy running a content and search king wasn’t the greatest idea. Since he took the helm Yahoo! has managed to hang on to its number 1 status, but on a property-to-property comparison the company has not been able to command its wide lead. Google has managed to suck up much of the talent out there, and the verdict on Panama versus Google is not yet known. He has a few more months, but if Panama is deemed too-little and too-late then Mr. Semel will be the one to bare the brunt of the blame.
Jon C. Ogg
December 14, 2006
This is part of "THE 10 CEO’s THAT NEED TO GO" series coming out today and tomorrow. Jon Ogg can be reached at [email protected]; he does not hold securities in the companies he covers.
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