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From Chief Yahoo to chief executive, Jerry Yang’s move to adopt a more formal role at the company he founded reflects Yahoo’s crying need for management to focus on its own structure.
Mr Yang, 38, and his more retiring co-founder David Filo have held the vague roles of Chief Yahoos as chief executives, chief financial officers and chief technology officers have come and gone since the company went public in 1996.
All three of the top posts have been vacated in the past six months – Sue Decker moved from CFO to become head of a new Advertiser and Publisher group and was on Tuesday named president of the company.
Zod Nazem, CTO, announced he was leaving the company this month after 11 years and has yet to be replaced. Terry Semel resigned on Monday as CEO to become executive chairman.
Yahoo also lost Dan Rosensweig, its chief operating officer, Lloyd Braun, the head of Yahoo Media, and John Marcom, its head of international operations, in December.
These losses and the departure of other key executives, a major reorganisation, a failure to fill posts and reports of low morale among employees at the Sunnyvale company have created the impression that Yahoo’s management is in disarray.
While Yahoo’s shares rose 4 per cent in after-hours trading on Monday with the news of Mr Semel’s resignation, they fell more than 1 per cent on Tuesday as analysts were divided on whether the latest changes would stop the management rot.
One view is that Jerry Yang could act like a Steve Jobs or Michael Dell in reassuming control of a company, getting it back on a course and lifting its staff. The opposing argument is that Jerry Yang has no experience as a chief executive and an outsider should have been brought in.
“Our concern is that the new management team looks a lot like the old management team,” says Derek Brown, internet equity analyst at Cantor Fitzgerald, of the Yang-Decker combination.
“This is a time when Yahoo is clearly struggling, it’s lost its momentum, competitive forces are taking market share away from it on a lot of different fronts, but the board has not taken a more aggressive step in trying to alter its trajectory.”
But he does acknowledge that Mr Yang has the experience to perform the role:
“Jerry’s been integral to the company’s strategy and operations from Day One, he’s been Yahoo’s public face and Jerry and Sue have been incredibly important to the development of Yahoo through the past few years.”
Yahoo’s display-advertising revenues have been squeezed by the growth of social networking sites and its search-advertising sales have suffered as it has struggled to introduce its new “Panama” technology.
Google, its biggest rival, has built up a seemingly unassailable lead among users. The Hitwise research firm said on Tuesday that Google accounted for 65 per cent of all US searches in May, compared to 21 per cent for Yahoo and 8 per cent for Microsoft.
There is inevitable speculation that Mr Yang’s appointment will be a temporary one, despite Mr Semel’s assertion that there had been lengthy talks on the succession.
Many analysts see Sue Decker as being groomed for the chief executive’s job, depending on how she performs as president. If neither of the new management team can lift Yahoo, the board is likely to seek an outsider as CEO or even an outside buyer for the company.
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