"Yahoo is a company that has always had good competitors, and Google will be a good competitor. There is plenty of room for Yahoo to thrive and for Google to thrive," Semel told reporters on the sidelines of a Milken Institute conference here.
has an estimated 5 percent stake in Google, which is expected this week to announce plans for an initial public stock offering that could value the company at about $20 billion.
But Yahoo also has expanded far beyond its corebusiness. Last year, the Sunnyvale, Calif.-based company invested more than $1 billion in acquisitions, as part of its effort to challenge Google in the lucrative business of Web search and keyword advertising.
Google, meanwhile, recently announced plans to get into the free e-mail business, which is now dominated by Yahoo and Microsoft's MSN unit.
Semel, a former Hollywood studio head credited with diversifying and reigniting revenue at Yahoo, told a panel at the conference that the nature of search is changing, as customers increasingly look for search engines to allow comparison shopping across the Internet.
"Search has become a lot more than we think of (as) search," he said.