Terry Semel is Out at Yahoo!, Well….Mostly Anyhow (YHOO)

This isn’t quite as good as it COULD have been, but Yahoo! (YHOO-NASDAQ) has finally gotten Terry Semel out as Yahoo!’s CEO.  Why do we say he is ‘mostly’ out?  He is still remaining on the board of directors remaining  as non-executive Chairman.  The company is tapping co-founder Jerry Yang as CEO and is naming Sue Decker as President.

It is surprising that the company did this After the shareholder meeting when they knew what was going on.  It didn’t take a rocket scientist to to realize that Wall Street wanted Semel out.  He was a great add-on when he came in after the dot.bomb bubble burst, but that time came and passed.  This doesn’t really get rid of him entirely and he may not even need to leave entirely.  The after-hours reaction is indicating this is good enough.  If you want to know when management needs some changes, this is a prime example.  Shares closed up almost 3% in normal trading on these rumors and shares are now up almost 5% more in after-hours to $29.50.

This makes 5 of our 10 CEO list that needed to go, although not all of the picks were for outright firings nor even outright replacements.  Over the last couple of weeks it was Yang that was thought of perhaps that Yang could take that Chief Technology position.

Terry Semel noted (consolidated): "The Board and I have long talkedabout the importance of ensuring a smooth succession in Yahoo!’s seniorleadership — and more recently, about the need for a leadership teamcommitted to carrying Yahoo! through its multi-year transformation. Aswe discussed my future goals and plans, I was clear in telling theBoard of my desire to take a step back sooner rather than later. Ibelieve Jerry and Sue, with their superb talents and intense dedicationto Yahoo! and its people, are the perfect combination to carry usforward. This is the time for new executive leadership, with differentskills and strengths, to step in and drive the company to realize itsfull potential — it is the right thing to do, and the right time isnow.  Jerry and Sue will make an unbeatable team. Jerry has long beenrecognized as an Internet visionary. His incredible experience andclose involvement since founding the company 12 years ago have givenhim tremendous strategic, technical and industry insight as well asunparalleled knowledge and understanding of Yahoo! and its greatpotential. We are equally fortunate to have Sue Decker, one of the mosttalented executives in the industry, as our new President. Sue hasplayed a broad and important role in driving our strategy over theyears, and has shown even greater skills and leadership with thesuccess she’s had in taking on more operating responsibilities. BothJerry and Sue have been great partners to me and I am looking forwardto collaborating with and supporting them both, as well as the Board,in any way that I can as Chairman. I’m proud of all that we’veaccomplished over the past six years during this exciting, still earlystage of the Internet’s development, and my single goal is to ensurethat Yahoo! achieves its full potential."

Jon C. Ogg
June 18, 2007

Jon Ogg can be reached at [email protected]; he does not own securities in the companies he covers.