Yahoo CEO and founder Jerry Yang "bleeds purple." Microsoft wanted to take control of his purple blood in its quest to compete with Google. Carl Icahn may want a plain old bloodletting. The corporate raider could send Yang packing or confine him to the boardroom if he continues with his effort to get a dissident slate elected to Yahoo's board of directors at an upcoming shareholder meeting.
But even if Icahn walks away, the battle for Yahoo's soul won't be over for Yang as he tries to maintain control of the company he founded in March 1995 with fellow Stanford graduate student David Filo. The fight doesn't get any easier from here as key executives abandon ship, products continue to be slow to get to market, and uncertainty hangs over Yahoo's Silicon Valley campus. In the immediate wake of the "Microsoft out, Google in" announcement, Yahoo's stock has slid 15 percent.
Yang might be called a reluctant CEO, and this tangled scenario can't be what the 39-year-old Yang imagined when he replaced Terry Semel as CEO almost a year ago, on June 18, 2007. The former Time Warner executive had led Yahoo's growth spurt, from revenue of $717 million in 2001 to $6.4 billion in 2006, but his Hollywood-honed skills and luck ran out over the last several months of his tenure.
At the somewhat contentious June 12, 2007 shareholder meeting, Semel didn't give any indication that a week later he would resign as CEO. In fact,Semel said Yahoo has all the pieces to be successful and that he couldn't wait to prove it. Less than a week later, he walked.
With Semel's abrupt departure, the board could have searched for an outsider to run the company, or appointed Decker or Yang as CEO. An external search would have taken months and put the company in limbo. Decker was not deemed ready to take over, although she had been groomed by Semel and was lauded for her business acumen.
That left Yang to run the show. He was respected by the troops, and had a vision of where Yahoo should go and the fervor of a founder. As Chief Yahoo for a dozen years, Yang had been involved in strategy, technology, and business development. But, the CEO job was a very different role, of course, and Yang didn't have extensive operational experience. But then neither did Decker, tapped to be president and Yang's No. 2.
Compounding the problem, Yahoo's management bench had become thin. Semel's exit had been preceded by the departure of two key operational executives, COO Dan Rosenzweig, who left in December 2006 with media chief Lloyd Braun in a management shakeup. Farzad Nazem, Yahoo's veteran CTO and executive vice president of engineering and site operations, retired from the company just a few weeks prior to Semel vacating the CEO role. (At the time of Semel's departure, Yang was also acting as the interim executive sponsor of Nazem's technology group.)
In his remarks at theD6 conference last month, Yang shed some light on his thinking and the board's vote to have him serve as Yahoo's chief executive:
"It wasn't lightly that I came to the decision I want to be CEO. I understand the challenges and I understand that I don't necessarily have all the experience, although I have admired Terry and Tim Koogle before him and just some great leaders who helped us run the company. But I also felt it's my time to really take Yahoo to the next level. I feel like I am most passionate and have the most vision about where for where we want to be.
"I know that people want to see results, and I think in this day and age a lot of people are more short-term oriented, but I think we are starting to show that Yahoo can be on this path to be a very different entity."
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