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02.27.07
Is Terry Semel On The Chopping Block?
 By
Joe Lewis
An article appearing in Yahoo Finance today outlines several missteps that the company has taken, all of which have led to the precarious position it finds itself in when compared to the enormous success and gargantuan search share that Google boasts.
Eric Jackson submitted a rather lengthy piece to Yahoo Finance today, and had no qualms about calling out Yahoo CEO Terry Semel, urging that he be replaced immediately due to several failures that many feel have damaged Yahoo in a significant way.
The list of Semel’s blunders that Jackson pontificates about is too lengthy to go over in detail, but one of them bears significant mention. This is one of the primary reasons that Jackson feels Semel should be ousted immediately:
Continued Loss of Share in Search. While Yahoo! has hastily pushed out the new Panama platform in the last month, partly in response to criticism from our stockholder group and other critics, there is no denying that it has lost critical momentum and share in the battle for search advertising dollars.
In fact, according to numbers from Banc of America Analyst Brian Pitz, Yahoo! lost share faster than Microsoft in the last quarter and year vis-à-vis Google. (According to Pitz: “In December 2006, worldwide search query share for Google was 65.4% (+51 bps M/M, +294 bps Q/Q, +647 bps Y/Y), compared to Yahoo!’s search share of 19.5% (+24 bps M/M, -140 bps Q/Q, -167 bps Y/Y) and Microsoft’s share of 7.9% (-29 bps M/M, -71 bps Q/Q, -155 bps Y/Y).”)
Even with a better ad platform running, more and more users are turning away from Yahoo! for their search needs.
While this point somewhat states the obvious, there’s no denying that Yahoo seems to keep moving in the wrong direction when it comes to search.
The Semel bashing doesn’t stop there, however, as Jackson also takes the opportunity to call for the replacement of the much maligned CEO, along with most of the company’s Board of Directors:
Terry Semel, Robert Kotick, Roy Bostock, Ron Burkle, Eric Hippeau, Arthur Kern, and Gary Wilson should be Immediately Replaced on Yahoo!’s Board of Directors. Terry Semel ultimately reports to Yahoo!’s board of directors. The board must be held accountable for the numerous missteps outlined above. Of the 10 directors, we believe 7 should resign or Yahoo! shareholders should withhold votes for them at Yahoo!’s 2007 annual meeting of shareholders.
We are in favor of only Jerry Yang (a Yahoo! co-founder), Ed Kozel, and Vyomesh Joshi returning. The latter two recently purchased shares directly in Yahoo!, while the other Yahoo! directors have only exercised stock options of late.
The irony, of course, is that this article had been prominently featured on Yahoo’s popular Finance site. Could it be that the deckhands at Yahoo are planning a mutiny in an attempt to right the company’s ship?
About the Author:
Joe Lewis is a staff writer for WebProNews. Visit WebProNews for the latest ebusiness news.
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