Semel Says Yahoo Shakeup Is Aimed at 'Future Growth'
In an exclusive interview with CNBC, Yahoo Chief Executive Officer Terry Semel said the management reshuffling at the Internet company is all about "future growth."
"We think it’s a great way to organize ourselves and we think we’ll be positioned for a lot more future growth," Semel told CNBC's Maria Bartiromo on "Closing Bell." "We read a lot about how innovative some of our competitors are. I think Yahoo is probably one of the most innovative companies out there."
Semel said he doesn't necessarily think many things "ail Yahoo" and is optimistic about the introduction of "Panama," a technology that will change the way the company places ads on the Internet in order to help boost revenue.
"Financially, we’ve been waiting for Panama," he said. "A lot of the other guys do monetize their search a lot better. Panama is now being introduced to many advertisers; they are starting to sign up now. We are starting to get really good feedback."
Semel also said he has no plans to step down.
"Having a Great Time"
“I’m having a great time, so I’m not going to leave,” he said. “I think this is a great opportunity for Yahoo and a great time to shine.”
Even so, Yahoo’s reshuffling puts a lot of pressure on Semel, who managed to hang on to the top post despite criticism about his performance.
Yahoo's reorganization, announced late Tuesday, is aimed at simplifying the company's structure as it battles Google and smaller, more nimble rivals and tries to recharge its growth.
Semel remains chief executive officer, while Yahoo chief financial officer Susan Decker, 44, will lead a new unit focused on advertising, a major source of income. Decker is now seen as a possible successor to the 64-year-old Semel.
Began at Warner Bros.
Before Yahoo, Semel spent 24 years at Warner Bros., where he served as chairman and co-chief executive officer. He was credited with building Warner Bros. from a company that generated less than $1 billion in annual revenue to one that pumped out nearly $11 billion total revenues from diverse businesses across 50 countries.
Prior to Warner Bros., Semel was in charge of Walt Disney’s Theatrical Distribution division and previously in charge of CBS’ Theatrical Distribution division. Semel is currently on the board of directors of Polo Ralph Lauren, the Guggenheim Museum and the Museum of Television and Radio.
Semel was named Yahoo’s chairman and CEO in May 2001, when Yahoo’s revenue was faltering. Today’s management reshuffling is an acknowledgement that it’s been a bit slow to adjust to an increasingly competitive landscape.
“There is a lot of unrealized potential there and, as an investor, it’s a bit frustrating,” said Ryan Jacob, portfolio manger of the Jacob Internet Fund, a $95 million fund, which holds Yahoo as its eighth-largest position.
"More of a Follower"
“The one criticism is that they have been more of a follower than a leader...And they approach the company more from the media side, maybe to the detriment of the technology side.”
That said, Jacob said that while Yahoo has taken a back seat to Google, it is in a “clear number two position" with a very strong franchise both in the U.S. and internationally.
He said a lot will rest on Yahoo’s Panama initiative, which will change the way it places ads in order to help boost revenue.
“If six or nine months from now there hasn’t been any meaningful improvement in terms of the direction, then I think (Semel’s) job is probably at risk,” he adds.
“I think there is a group of people that didn’t want him to stay, but we don’t think that’s the issue,” adds Brian Pitz, an analyst with Banc of America Securities. “Terry is a great leader that has outstanding contact with advertises and it makes a lot of sense what he is doing here.”