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June 19, 2007

End of Era as Semel Exits Yahoo!

Terry Semel handed his resignation to the Yahoo Board of Directors yesterday after spending six years at the helm of the twelve year old search portal. Co-Founder Jerry Yang was quickly appointed as the new CEO with Susan Decker moving into the president’s seat.  Semel will continue to sit as a non-executive Chairman of the Board and as an advisor to the new the new management team.

Semel oversaw Yahoo!’s fortunes since 2001, leading Yahoo! through a phenomenal period of expansion and acquisition, including the purchases of PPC pioneer Overture and the social photo sharing network Flickr. Semel has also held the helm in Yahoo!’s fight against the Google juggernaut, a competition that tied his tenure to a sense of corporate failure.

In an open letter to Semel, Yahoo! Board Member Ed Kozel noted that under Semel, Yahoo! had actually seen several successes that in any other company in any other industry would be considered to be tremendous gains. Revenues have increased nine-fold from the operating loss Yahoo! faced in 2001 to the $1Billion in income realized last year. Yahoo!’s user base has quadrupled from 170million to over 500million in 2006, as has the size of Yahoo!’s staff from 3,500 to about 12,000.

In a release issued by the company, Semel said,

“The Board and I have long talked about the importance of ensuring a smooth succession in Yahoo!’s senior leadership — and more recently, about the need for a leadership team committed to carrying Yahoo! through its multi-year transformation. As we discussed my future goals and plans, I was clear in telling the Board of my desire to take a step back sooner rather than later. I believe Jerry and Sue, with their superb talents and intense dedication to Yahoo! and its people, are the perfect combination to carry us forward. This is the time for new executive leadership, with different skills and strengths, to step in and drive the company to realize its full potential — it is the right thing to do, and the right time is now.

“Jerry and Sue will make an unbeatable team. Jerry has long been recognized as an Internet visionary. His incredible experience and close involvement since founding the company 12 years ago have given him tremendous strategic, technical and industry insight as well as unparalleled knowledge and understanding of Yahoo! and its great potential. We are equally fortunate to have Sue Decker, one of the most talented executives in the industry, as our new President. Sue has played a broad and important role in driving our strategy over the years, and has shown even greater skills and leadership with the success she’s had in taking on more operating responsibilities. Both Jerry and Sue have been great partners to me and I am looking forward to 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’ve accomplished over the past six years during this exciting, still early stage of the Internet’s development, and my single goal is to ensure that Yahoo! achieves its full potential.”

Yahoo! shareholders have been calling for Semel’s head for almost two years as he has been unable to find a lot of traction in the company’s fight against rival Google. Commenting on the switch, Yahoo! Board member Ed Kozel said,

“We believe there is no better person in the world to run Yahoo! now than our visionary co-founder Jerry Yang, who has helped build and run this company over the past 12 years. Jerry provides phenomenal strategic, technical, product and market leadership, has developed important relationships with major business partners, and has defined and nurtured Yahoo!’s unique, winning culture. As the public face of Yahoo!, Jerry has been instrumental in attracting world-class talent to the company at all levels. In our new President Sue Decker, Jerry has the perfect partner. Sue was an outstanding CFO, has played a key strategic role as part of our senior management team, and in her growing operational role, has had enormous success as well. We are confident we have the right team in place to realize the enormous opportunities ahead.”

The newly minted CEO, Jerry Yang again finds himself heading the company he and Dave Filo founded over a decade ago. In his own press statement, Yang wrote,

“I’m delighted to assume this leadership role at the company David Filo and I started 12 years ago. I want to thank Terry for his many contributions to Yahoo! and for giving the company six of its best years. He has been not only a strong leader, but a consummate partner. And, Sue and I look forward to working with him to build on our firm foundation for future success and improved financial performance. Sue has been an integral part of the management team and knows the company incredibly well. She has demonstrated her ability to build successful teams, drive critical partnerships, and lead some of our most important business initiatives. And she has proved herself to be adept in an increasingly broad range of complex operational responsibilities. I am very excited to be leading our exceptional team of 12,000 Yahoo!’s around the world. It’s an honor and a great responsibility, and I look forward to the challenge. My immediate and overarching priorities are to realize Yahoo!’s strategic vision by accelerating execution, further strengthening our leadership team and fostering an even stronger culture of winning.”

Yang also wrote about the change on the Yahoo! Yodel Anecdotal blog saying,

“The title of Chief Yahoo takes on new meaning today. I have the great honor of stepping into the role of Yahoo!’s Chief Executive Officer. Yahoo! has an incredibly bright future and I make this move with deep conviction and enthusiasm. I’ve partnered closely with our executive teams for 12 years to steer our strategy and direction and today I’m ready for this challenge.”

Many thought that Susan Decker, the former CFO and head of the advertiser and publisher group to take over after Semel’s exit. Speculation is that Yang’s time as CEO will be short as Yahoo! continues to cultivate Decker to assume the CEO role.

Investors appeared pleased with the news and Yahoo!’s stock shot up several points after the announcement was made, closing a full dollar per share higher at $28.12 yesterday.

Author:  Jim Hedger is the Executive Editor of