Timing Is Everything for Semel
While both newly departed Yahoo CEO Terry Semel and company co-founder and Semel replacement Jerry Yang insisted in interviews yesterday that Semel left on his own steam, there has been clear disgruntlement growing inside Yahoo–even from those who liked Semel–and on the board about stemming the growing feeling that Semel was not the one to lead Yahoo out of the mire.
I am not sure what the problem is in admitting this, given that Semel did have some pluses in his column. For example, under his leadership, the Internet portal’s revenue rose ninefold, to $6.4 billion last year.
And Semel did ride the stock up from its all-time lows in 2001, despite its recent falloff. In fact, the stock price was at a low of under $5 right after Semel got there in 2001.
About a year ago, it was almost $44, but it has fallen since then, as problems have mounted, with shares dipping below $30 recently.
While Semel tried a bunch of moves, mostly moving around management slots, his main issue was timing–in that he was the one on watch when Google rose to its current dominance.
While I am in no way excusing him, Yahoo was not equipped to face down a much more technologically adept rival, who used its computing might to invent algorithms to let it more efficiently rake in the dough from ad search queries.
Semel tried to battle the Google brainiacs by spending billions to buy Yahoo’s way into tech supremacy with the purchases of Inktomi and Overture.
While that was not enough to catch Google, sources inside Yahoo said yesterday Semel’s slowness to take strong control of Overture, especially from its executive team led by Ted Meisel, kept the service from innovating as quickly as it needed to.
And then once Semel decided to ring the ad search alarm bell, his intense focus on it to the detriment of other Yahoo divisions was also disheartening to some there. Many, many former and current executives complained to me about the starving of other popular parts of Yahoo so that search would eat well.
Now, of course, that’s all Yang’s problem. But instead of just Google (there will always be Google, the Moby Dick of both Yahoo and Microsoft), he has to now convince those inside and outside Yahoo that his timing is impeccable.
Please see this disclosure related to me and Google.