Internet company Yahoo Inc.'s board of directors on Tuesday named a former top Warner Brothers Inc. executive as the company's new chairman and chief executive officer (CEO).
Terry S. Semel will be the company's new top executive as of May 1 and will takeover the reins of a company that has hit some turbulent times during the current U.S. economic downturn, the company said in a statement. Tim Koogle, Yahoo's former chairman and CEO, who stepped down from his post on March 8, will be named vice chairman of the Santa Clara, California-based company until August, and will then remain on the company's board of directors. Yahoo President and Chief Operating Officer Jeff Mallett and Chief Financial Officer Susan Decker will continue in their roles and report to Semel, the company said.
In a conference call Tuesday afternoon, Koogle said that he is taking a low profile after August because he "wants to make sure there's no question about who is running this company."
Semel's appointment comes as Yahoo struggles to steady the boat amid rough economic waters, which have doused online advertising spending -- the company's main source of revenue. During the conference call, original Yahoos, as they call themselves, expressed their hope that Semel can do for the company what it did for Warner Bros.: Strengthen the company's main revenue stream while diversifying the business.
Semel spent 24 years at Warner Bros., where he served as chairman and co-chief executive officer. At Warner Bros., Semel is credited with assisting in building the entertainment company's revenue from US$1 billion to $11 billion with multiple business units in 50 countries, Yahoo said. Semel left Warner Bros. in 1999 and founded Windsor Media Inc.
In an effort to boost investor confidence Tuesday, Semel likened Yahoo's current travails of a single revenue stream and a challenging economic environment to those Warner Bros. faced when he first took the helm there, and pledged to lead the same kind of turnaround at Yahoo.
Despite Semel's experience, analysts are taking a wait-and-see stance toward the former entertainment executive, conveying signs that they were still unsure of how his broad media experience will lend itself to Yahoo's base advertising business.
Yahoo executives said during the conference call, however, that Yahoo "will be moving to a different level," which may require a different style of leadership. When asked if there is a chance that Yahoo will partner with a large media company, such as the merging between the company's archenemy AOL and Time Warner Inc., outgoing CEO Koogle said that he is confident Semel could "form all the right partnerships to enhance Yahoo's brand and value."
Semel repeatedly stated his desire to work closely with the current Yahoo leadership, however, perhaps implying that Yahoo's executive bloodletting has finally ceased. The company has lost a handful of executives recently, particularly in its marketing area.
Semel's acceptance atop the Internet giant officially brings the company's six-week executive search to a close.
"We only gave one offer, and only got one answer: that was with Terry," Koogle said.
Semel, as part of coming on board with Yahoo, has purchased 1 million shares of Yahoo stock, the company said. Yahoo's stock (YHOO) was down 2.89 percent in late afternoon trading Tuesday.
(James Evans in Boston contributed to this report.)