SANTA CLARA, Calif. — Yahoo! Inc., again turning to an Old Economy veteran in a bid to shore up its management team, has named former Warner Bros. Chairman and co-Chief Executive Terry Semel its new chairman and CEO, ending a search that lasted more than a month.
Mr. Semel’s appointment is effective May 1.
Yahoo on Tuesday said current Chairman and CEO Timothy Koogle will become vice chairman, a transitional role he is expected to maintain until August, when he will remain a director.
President and Chief Operating Officer Jeff Mallett and Chief Financial Officer Susan Decker will remain in their current roles and will report to Mr. Semel, the company said.
Yahoo (YHOO) also announced that Mr. Semel purchased one million shares of Yahoo common stock from the company in a private placement. Mr. Semel served 24 years at Warner Bros., rising to chairman and co-chief executive.
Mr. Semel and co-Chairman and Chief Executive Robert Daly resigned from Time Warner Inc.’s Warner Bros. and Warner Music in July 1999, saying they wanted to pursue new business opportunities on their own.
The balance of power within Time Warner had shifted away from the studio to the cable side of the company. Moreover, Messrs. Daly and Semel faced a radical transformation of the business due to technology and economic pressures. Although relations were described as good, the duo was being scrutinized by Ted Turner, who often questioned the culture of big spending and lavish perks that has dominated Warner Bros. under the pair.
Yahoo, one of the leading Internet portals, has been struggling to find its footing amid personnel changes and a severe downdraft in online advertising.
Last month, the company tapped an executive from Reader’s Digest Association Inc. (RDA) as executive vice president of its North American operations. Gregory C. Coleman, who most recently served as senior vice president of Reader’s Digest, will be responsible for Yahoo’s overall North American operations.
The personnel moves have come amid a number of changes. Earlier in March, Yahoo warned for the second time that it would miss Wall Street’s first-quarter earnings and revenue forecasts, and that it had started a search for a new chief executive to succeed Mr. Koogle, who was to remain chairman. The announcement came amid a plummeting Yahoo share price and the continuing deterioration of Internet advertising.
Shortly after that announcement, Anil Singh, chief sales and marketing officer and senior vice president of business operations, said he planned to leave the company altogether and retire in May. Mr. Singh’s exit also came on the heels of several other executive departures.
Meanwhile, Yahoo has faced some criticism for its insular ways. According to The Wall Street Journal, Mr. Koogle’s relinquishing of his CEO post amounted to an acknowledgement of something people close to Yahoo had increasingly been saying: that the tightknit, us-against-the-world management style that fueled Yahoo’s astronomical rise may also have exacerbated its decline.
Last week, Yahoo reported a steep drop in first-quarter revenue and said it will reduce its work force by 12%, discontinue some services on its Web sites and lower marketing and promotional expenses. The company, which employs 3,510 people, also will outsource and consolidate some operations.
For the first quarter, Yahoo reported a net loss of $11.5 million, or two cents a share, compared with net income of $67.6 million, or 11 cents a share, a year earlier.
Excluding acqusition-related expenses and charges, as well as expenses related to employee stock options, the company said it would have posted earnings of $7.6 million, or one cent a share, compared with $60.5 million, or 10 cents a share, a year earlier. The mean estimate of analysts surveyed by Thomson Financial/First Call was for Yahoo to break even from operations.
Revenue fell 22% to $180.2 million.
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