Netflix 200 million subscribers COVID-19 vaccine Best Buy sale Missing stimulus check Biden inauguration: How to watch Parler is back online Track your stimulus check

Wall Street awaits word from Yahoo's Semel

Analysts will be listening eagerly when the Web bellwether reports second-quarter earnings, with its new chief executive, Terry Semel, front and center.

Wall Street analysts will be listening eagerly after market close Wednesday when Web bellwether Yahoo reports second-quarter earnings, with its new chief executive, Terry Semel, front and center.

The day will be important for Semel, who will be making his first public address on behalf of the company since his appointment two months ago. Among other things, analysts will be watching for details about the direction Semel plans to take the embattled Web giant, which has suffered greatly from the sour online advertising climate.

Semel has his work cut out for him. The former co-chairman of Warner Bros. inherited a company that laid off a chunk of its employees and twice slashed revenue projections because of exposure to the collapsing online advertising market.

"While still early on the job, we do expect Semel to articulate his general long-term vision for the company, including his plan for focusing on consumer entertainment and corporate Internet services," Paul Noglows, equity analyst at J.P. Morgan H&Q, wrote in an investor note.

Wall Street expects the company to break even this quarter, down from 12 cents a share during the same period a year ago, according to First Call's consensus of analysts.

When appointed CEO in April, Semel said he planned to introduce more paid services throughout Yahoo's popular network of sites. Semel also emphasized Yahoo's corporate services division, which sells custom versions of its portal to corporations, as an area for growth.

So far, however, Semel's only major moves as head of the company have taken an entertainment bent. The company in June announced its intent to acquire, an online entertainment site that features music videos and music news. The company also revamped Yahoo Broadcast to take on a stronger entertainment focus, serving as a destination for video programming.

These deals build on an existing agreement with Pressplay (formerly Duet), the planned online music-subscription service from Vivendi Universal and Sony.

When Yahoo tapped Semel to head the company, he touted his ability to significantly grow revenue during his days at Warner Bros. He pointed to this as one note of reassurance for investors. Most analysts then and now, however, agree that Semel's experience as a Hollywood studio powerbroker remains an uncertain fit given Yahoo's need for an experienced advertising executive.

Why follow the leader?
For this reason, some Yahoo analysts remain skeptical about Semel's ability to lead the company.

"While there are many similarities between Mr. Semel's work at Warner Bros. and Yahoo, there are also a great many differences," Lowell Singer, an analyst at Robertson Stephens, wrote in an investor note. "Thus, we believe that it could be some time before we can accurately gauge the new CEO's effectiveness."

Another key issue that Semel needs to sort through is management. Since taking the helm, he has turned to former Hollywood associates to either fill positions or to serve as informal advisers. And many longtime Yahoo executives have switched roles in the company.

Yahoo President Jeffrey Mallett stepped away from daily operations and handed the reins to Gregory Coleman, head of North American operations. Other vice presidents, such as former corporate development head Ellen Siminoff, have also taken different roles in the company.

And there are still many factors that are out of Semel's reach--namely, the slow advertising market.

The indicator of whether Yahoo has turned things around will be the company's "deferred revenue," or revenue that was recently booked but doesn't officially count advertising dollars, said ABN AMRO analyst Arthur Newman. Deferred revenue last quarter reached $127 million, up from $117 million the quarter before.

"Any slip in this figure could indicate poor advertiser support and a continued decline in advertising revenue growth," Newman said.