Blogs Dissect Yahoo! Shakeup

The Semel-for-Yang CEO shuffle didn't surprise many tech bloggers, whose reactions ranged from hope to doubt to expectations of more change

by Douglas MacMillan

News that Terry Semel would depart as chief executive of Yahoo! (YHOO) came as little surprise to many of the tech bloggers who have been charting the Internet portal's decline in recent months. Warning signs included slowing growth, sliding shares, upheaval within executive ranks, and disappointment with efforts to narrow Google's (GOOG) lead in Web search. "It didn't take a rocket scientist to realize that Wall Street wanted Semel out," wrote Jon Ogg, operator of 24/7 Wall St. Six months ago, Ogg had included Semel in a list of 10 CEOs who ought to go, and on June 18, the day Semel's move was announced, Ogg noted that five from his list already had headed for the exits. Semel will be replaced by Yahoo co-founder Jerry Yang.

Bloggers noted that Semel's appointment as nonexecutive chairman played down his responsibility for the company's recent underperformance. "They really are soft-selling this, with everyone supposed to walk away shiny and happy about Semel's exit upstairs," wrote Paul Kedrosky on his blog Infectious Greed. Adds Valleywag's Nick Denton, "With Yahoo's new Panama ad marketplace unproven, the company hemorrhaging talent, and the strategic direction still unclear, Semel's new position is too obviously a face-saver."

Techdirt's Joe Weisenthal noted the frequency whereby tech titans have "turned to their founders to revive flagging fortunes." Consider Michael Dell's resumption of the CEO role at Dell (DELL) this year and Steve Jobs' return to Apple (AAPL) in 1997.

Yang vs. the Skeptics

Seeking to assure shareholders, Yang contributed to the Web chatter. "The past year has obviously not been an easy one for us," he wrote on the Yahoo blog Yodel Anecdotal. "But we've taken important steps to address the challenges we face, and we're starting to realize some of the benefits."

A handful of bloggers, including the Virtual Investor's Ben Metcalfe, appear to be giving Yang the benefit of the doubt. "I hope Jerry can bring the passion back," Metcalfe wrote. "If anyone can, the co-founder can."

Not everyone in the blogosphere is convinced Yahoo made the right move. "The failure to bring in a new set of eyes and skills in the CEO slot to compete with Google is certainly a risky move," wrote Adario Strange in Wired's Epicenter blog. A commenter on PaidContent's blog identified as Talib Morgan agrees that the company should have gone with someone who brings "a fresher perspective."

Temporary Challenge?

Indeed, Yang may be only a temporary replacement, according to some. "A sudden change like this signals that a lot of drama might be going on behind the scenes," wrote TechCrunch's Michael Arrington.

Leading the list of candidates who could replace Yang in the top job is Susan Decker, who was promoted to president. "If she can reignite growth, and the stock, that CEO title could become hers as well," wrote Business 2.0 editor Eric Schonfeld in his blog The Next Net. "If she can't, then expect the board to find a new CEO from outside Yahoo."

Temporary or no, Yang faces challenges altogether different from the ones he tackled more than a decade ago when he helped found the company. And he'll be operating under much closer scrutiny. "Every word [Yang] says will be dissected," wrote Allen Stern for Center Networks. "Every memo will be leaked, and bloggers will post them."

MacMillan is a reporter at BusinessWeek.com in New York.