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Semelis out. Yang is in. A new Yahoo!  

2007-06-19 00:53:04|  分类: 默认分类 |  标签: |举报 |字号 订阅

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Except for the sudden timing, Yahoo!'s announcement June 18that Terry Semel is leaving as chief executive was remarkable onlyfor how few people were surprised. After all, the Internet pioneerhad turned in one disappointingly slow quarter after anotherrecently. And Yahoo couldn't seem to catch up to today's online hothands, from search giant Google (GOOG) to social-networking services such as NewsCorp.'s (NWS) MySpace and upstart Facebook. At Yahoo's annual meeting on June 12 (seeBusinessWeek.com, 6/13/07, "Yahoo's Semel Faces the Music"), shareholders very publiclylaid the problems squarely at the feet of Semel, slamming hisstrategy, execution, and $72 million pay package last year.

But Yahoo's choices of co-founder Jerry Yang as new chief executive and veteran executiveSusan Decker as president raises as many new questions as itanswers. Chief among them: Is this just a temporary move, a safechoice to keep the Yahoo troops on board and investors at bay whileYahoo scrambles to come up with a new strategy? Or, after a year ormore of rumors and talks of a Yahoo acquisition, does this just buymore the company more time to field purchase offers?

Temporary Tenure?

Close observers aren't sure even Yahoo's board knows the answer.But the betting is that because Yang and Decker have beenintimately involved with Semel, who will remain nonexecutivechairman, not much will change in the short term. "I think peoplethat look at this as some kind of watershed event that is going toresult in fundamental change at the company are going to bedisappointed," says Scott Kessler, an analyst at Standard &Poor's (like BusinessWeek, S&P is owned by theMcGraw-Hill Companies (MHP)). "These are two people that I don't seesignificant change from," says Kessler, who has a hold rating onYahoo (YHOO) shares.

Kessler's pessimism is understandable. Highly respected withinYahoo, Yang nonetheless hasn't been an executive at Yahoo since itsearly startup phase. And Decker, despite whispers among Yahoos thather elevation to head of Yahoo's advertising group last Decemberwas a sign she's being groomed for the top job, apparently hasn'tpersuaded the board or investors she's ready yet.

Nonetheless, some observers believe that Yang's tenure as chiefexecutive, while put forward as more than a temporary appointment,may be short-lived. One executive recruiter familiar with Yahoo'smanagement believes the board will launch a search of outsidecandidates for chief executive, though it's believed that if Deckerproves herself, she could still get the nod for the top job at somepoint.

Investors Are Waiting for Results

All that may explain why investors are only mildly pleased withthe shake-up. The company's stock rose about 5% in after-hourstrading—a tepid response given that shares are still down 17% fromtheir 52-week high, even after a 3% gain before the announcement.Despite continuing speculation that Yahoo might be for sale, manyshareholders are clearly not betting on it.

Nor should they, it appears. April rumors of takeover talks withMicrosoft (MSFT) proved groundless. And one former executivewith close ties to people at the company has taken recent callsfrom private equity firms assessing whether Yahoo would be a worthypurchase. However, this person doesn't think they will make bidsbecause Yahoo's properties are so interconnected that it's tough tosee how enough sizable units could be sold to unlock value. At amarket value of $38 billion, it's an expensive acquisition for anycompany.

Despite the continuing skepticism by analysts and investors,Yang and Decker signaled during a conference call after theannouncement that they will be trying to make some big changes.They mouthed praise of Semel's six-year tenure, including areorganization last December that they said has speededdecision-making and streamlined operations. But it was hard not tohear an urgent need for change in their comments. Yang emphasizedthat his key role would be to retain talent in the wake of a steadystream of executive and engineering departures for more than ayear. "We want to be a better Yahoo," he said. "It's imperativethat we execute with speed, clarity, and discipline."

Likewise, Decker said Yahoo will in part dismantle thereorganization that Semel announced only six months ago. Yahoo hadbeen looking for someone to head an audience group aimed at makingsure more people flock to Yahoo's myriad properties, from its homepage to sports, finance, music, and other sites. Instead, she willcombine the advertiser group with the audience group and head itherself. The company is still looking for a technology chief toreplace Farzad Nazem, who departed recently.

But precisely what moves the two will make remains uncertain.Some analysts believe the company needs to continue scaling backoperations that aren't attracting advertisers. Yahoo also has triedto tap into the frenzy for social networking. But beyond some smallsuccesses, such as Yahoo Answers, a volunteer question-and-answerservice, and the purchase of the fast-rising photo-sharing serviceFlickr, Yahoo has failed to come up with world-beating socialservices.

Most of all, analysts say Yahoo needs to prove that its newsearch advertising system, called Panama, will help close the gapwith Google. Decker said second-quarter results would showbetter-than-expected progress with Panama. However, she saidearnings guidance issued in April would likely come in only betweenthe midpoint and the low point of those estimates because growth indisplay advertising continues to slow.

Time for a Change

For well over a year, talk that Semel's days at Yahoo might benumbered kept rising in volume. But in recent weeks, it appearsthat discussions of Semel's future intensified. Indeed, Semel saidin the conference call that succession discussions had been "goingon for quite some time.…. I saw myself as a coach more than aplayer going forward," he said.

At the June 12 annual meeting, neither Semel nor Yang, who wasasked by a shareholder if he would step up to take a bigger role,gave a hint that such a big change was imminent. Some analysts andother observers believe that two shareholder votes at the meetingmay have persuaded the board to take immediate action. More than32% of shareholders withheld their approval of at least onedirector, and nearly 35% voted for a proposal to tie executive paymore closely to company performance.

The only thing some former Yahoos agree on is that the pair mustdo a better job than Semel. The change, says one former seniorexecutive, was "way, way, way overdue." This person, as well asother former Yahoo executives and managers, say the company becamemore bureaucratic under Semel, slowing innovation at a time whenGoogle and a raft of new Web companies were coming on strong.

Missed Opportunities

It's not that Semel and other Yahoo executives didn't realizethe urgency of catching Google in Web-search share and revenue. Buttime after time, Yahoo missed opportunities that others seized.News Corp. bought the social-networking site MySpace nearly twoyears ago for $580 million, while Yahoo didn't manage to snagnow-ascendant Facebook despite offering as much as $1 billion lastyear. Last year, Google bought the fast-rising video-sharing siteYouTube for $1.6 billion while Yahoo struggled to consolidate its16 video offerings.

That trend continued this year in Yahoo's own backyard of onlinedisplay advertising. Google made a $3.1 billion deal for ad-servingnetwork DoubleClick, which is pending regulatory approval, andMicrosoft shortly thereafter spent $6 billion on aQuantive. For itspart, Yahoo bought the rest of Right Media, in which it purchased a20% stake last year, but at a much higher valuation for a companywhose presence trails those two.

Bringing Back an Insider

Semel also represented a different mind-set and culture fromYahoo's Silicon Valley roots. His Hollywood style and focus nevermeshed there, even after he was credited with turning the companyaround following the dot-com bust in 2000. "There's always beenthat chasm between technology and entertainment," says JimMoloshok, a former Semel cohort at Warner and vice-president formedia and entertainment at Yahoo until late 2005.

By most accounts, Semel also didn't develop a deep enoughunderstanding of technology. "He was a fish out of water," saysformer Apple executive Jean-Louis Gassée, now a venture capitalistwith Allegis Capital. "He just doesn't have the touch fortechnology, which is a necessary but not sufficient condition forsuccess [on the Internet]. That's what propels Google."

For all the challenges, both Yang and Decker win kudos,especially inside Yahoo, which as much as anything needs a strongdose of managerial inspiration. "Jerry's got a uniquely honedintuition about the industry," says a former executive. "But doeshe have the skill set and the guts?" Decker, this person says, issmart and disciplined, but untrained in technology, marketing, orsales. "Together, they might be O.K. But they're exercising thesemuscles for the first time."

 
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