Yahoo Says Terry Semel Resigns as CEO

Google, Er, Yahoo Car Needs a Bath

[I’m CEO of Zooomr]

Wow. Those words “Yahoo Says Terry Semel Resigns as CEO” just ran across my Bloomberg terminal 10 minutes ago. Apparently Jerry Yang is going to step in as CEO and Sue Decker’s stepping in as President. The stock’s up 5% in the after market.

I can’t say that I’m really surprised by this. I’ve been a critic of Semel’s for a while now. More recently Semel came under a great deal of fire from Yahoo shareholders for his enormous pay package.

Last week I posted on Semel and particularly expressed concern over his whopping $71 millon plus pay package last year. According to the Associated Press this was more than any other CEO amongst 386 publicly held companies covered in the Associate Press analysis of nation’s top corporate paychecks.

Semel also has been accused of taking well over $400 million in his tenure from Yahoo coffers, despite lackluster stock performance and a blistering pounding in market cap as compared to rival Google. While Semel helped propel the company out of the great bear market of 2000-2002, in more recent years the company has lagged their competitors.

As far as I’m concerned I say good riddance. In my opinion Yahoo has over the past 3 years built an absolute all star line up of social media properties. They got many of the right pieces but could never execute on their vision of social search. Furthermore I believe that not only have they not executed on a vision of social search, but that they have bungled the communities that they have purchased and actually done more harm to the company than good.

Anecdotally, almost everyone I’ve talked to about Yahoo has expressed to me that the company is a wreck. That people are unhappy. That executives are leaving. That bureaucracy reigns supreme and that almost nothing can get done in the current environment. While there may be lots of reasons for this, at a certain point you have to look at your CEO and ask yourself if he is not in fact part of this problem. And this is what it would appear Yahoo has done today.

Hopefully with Semel’s departure Yahoo can use this as a catalyst to restore much of the beating that they’ve taken in public opinion recently. Their rejection last week of a shareholder anti-censorship proposal. The ongoing negative press that they continue to receive over their role in the jailing of Chinese journalist Shi Tao. The recent bout of censorship at Flickr. Hopefully Yahoo uses this departure to reposition the company as advocate for human rights. As anti-censorship. As the community powerhouse that they really could become.

Google is smart. For all the crap they get sometimes for the “Don’t Be Evil” thing, it’s carried them a certain distance as well. Paying Semel all that money was probably evil. Helping to jail Shi Tao was evil. Rejecting last weeks anti censorship provision is evil. Yahoo needs to take this opportunity to redefine who they are as a corporation, learn from their recent mistakes and emerge a better corporate citizen — one worthy of the respect of the communities that make up much of the Yahoo empire today.

Official PR release here.

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7 Comments

  1. Eric Weaver says:

    Jerry’s a great guy with the right kind of spirit…I’m encouraged by this.h

  2. Dave Ward says:

    When did Yahoo! start their long tradition of buying great startup companies and then destroying them? I think it goes back to around 1997 or 1998, doesn’t it? And when did Semel become CEO? he may have been part of the problem, but he’s also far from the whole problem.

    I think there’s a bad tendency in the business world to pin all the blame on one person, sack that person, and then make no further changes but just continue as if everything is fixed now.

    That’s certainly not going to work for Yahoo.

  3. Siebbi says:

    I don’t know much about business things but I believe that if a company reaches a “critical mass” it goes down somehow. When too much money comes to business the shit begins sooner or later.

  4. Anonymous says:

    How about not having a backup plan for all your customers’ precious content cuz you needed to save a few bucks? Isn’t that evil?

  5. Jeff says:

    siebbi, it’s not solely about money coming into a company that makes large companies less nimble and innovative. When companies get large, they tend to be much more in the public eye, which also makes them bigger targets for lawsuits. Then, everyone from the the PR people through the product people get much more risk averse – too much so, in my opinion, in Yahoo!’s case. Also, you have that many more levels of management to sift through to get decisions made. Combine that with a risk-averse culture, and you have a bunch of people who don’t want to put their butts on the line passing decisions through an extensive management chain with the result that it takes forever to get things done. I’ve been at Y! over 7 years and these factors are, in my opinion, the biggest negative changes in the company during my tenure.

  6. jellis629 says:

    Thomas Hark says: “Google is smart…”

    Hilarious. You crack me up.

    PC World says:
    “Even outside its own activities, Google’s support for the free flow of information is not absolute. Where governments discourage the free flow of information, Google has defended its right to censor search results. Earlier this month, the company’s top executives defeated a shareholder resolution that would have required the company to stop proactively censoring search results, while permitting the company to engage in censorship when legally required to do so.”

    http://www.pcworld.com/article/id,132357-c,currentevents/article.html

    Also, see http://www.pcworld.com/article/id,131745-pg,1/article.html

  7. Jellis629 says:

    “Google is smart….”

    HAHAHAHAHA

    Link to the resolution rejected by Google’s shareholders last month.

    http://sec.gov/Archives/edgar/data/1288776/000119312507073756/ddef14a.htm#rom97745_48

    Do your homework, “Thomas”.