There were many cheers as well as sadness when Yahoo’s CEO, Terry Semel announced he would resigning his position. There was much controversy between board members about his salary and his competence in the job. Jerry Yang, the co-founder and board member of Yahoo, will be replacing Terry Semel which excited a lot of investors and other business people. Usually when a CEO steps down it isn’t a good sign but with the recent and consistent decline in Yahoo’s profits, many are interested to see what Jerry Yang can do with the company. During Terry Semel’s resignation he said, “This is the time for new executive leadership, with different skills and strengths, to step in and drive the company to realize its full potential. It is the right thing to do, and the right time is now.” Terry Semel reportedly made nearly $40 million dollars last year as the CEO of Yahoo in contrast to the CEO of Google, Eric Shmidt who only take a $1 dollar salary but receive stock which motivates him even more to make his company successful.
Many people, including Wall Street investors, are excited to see founders of companies return as CEO’s because of their love and drive for the product they originally created. Steve Jobs of Apple is one of the best examples. Terry Semel started out with a bang and lasted nearly 6 years with rising stock prices but they have dropped a heavy 30 percent in the last year and a half. Yahoo’s stock has already begun to rise since the resignation announcement just a few days ago. Terry Semel has had some good CEO experience at Warner Bros and the Warner Music Group but many are unsure why Yahoo has competed so poorly and why Semel wasn’t able to keep up with the Internet giant, Google. The quick rise and Internet dominance of Google since it went public in late 2004 when it overtook Yahoo as the number one search company, marked the decline of Yahoo. Google is an extraordinary example of a break out company. They now make more money in one quarter than Yahoo does in an entire year. Google stock is now worth about six times as much as when it was when it went public. They continue to add new and innovative products while Yahoo appears to remain stagnant. Both companies continue to acquire other companies but Google has been much more successful in their acquisitions and have had the funds to pick up some well known and very complimentary companies.
Although Yahoo is still fighting to keep their number 2 spot in the search engine world, they really only have room to grow. While most people still stick with Google, with some new products and improvements in its search capabilities, they can regain some of their market share and stock price. It’s unlikely they will ever really compete with Google but if Yang learns some lessons from Steve Jobs, they can make a big impact.
