TELECOM Digest OnLine - Sorted: When Terry Met Jerry, Yahoo!

When Terry Met Jerry, Yahoo!

Monty Solomon (
Sat, 28 Jan 2006 23:27:49 -0500

The New York Times
January 29, 2006

WHEN Yahoo Inc. announced nearly five years ago that Terry S. Semel,
then a former leader of the Warner Brothers motion picture studio,
would become its chairman and chief executive, the reaction both
outside and within Yahoo was not exactly one of wild encouragement.

Despite a hugely successful career running companies that make movies,
television shows and music, Mr. Semel was immediately labeled an "old
media" guy. Worse, he was a Hollywood guy, and had barely touched a
computer during the nearly two decades he oversaw Warner Brothers with
Robert A. Daly.

Even though he had been making private Internet investments since
resigning from the studio two years earlier, when people associated
"Semel" and "Yahoo," they were more likely to think of an Australian
comic named Yahoo Serious who starred in the 1988 Warner Brothers flop
"Young Einstein." Mr. Semel's former boss at Time Warner, Gerald
M. Levin, who had just completed his merger with America Online,
laughed incredulously when he heard the news of Mr. Semel's new gig in
April 2001, according to an executive who was with Mr. Levin at the

At Yahoo, where the collapse of the dot-com bubble and the evaporation
of online advertising had just helped sink the company's market value
from a peak of $127 billion to just $12.6 billion when he joined, the
reception wasn't much warmer. Mr. Semel, then 58, had neither geek
cred like that of Yahoo's co-founders, Jerry Yang and David Filo, nor
Silicon Valley venture-capitalist swagger. Mr. Semel looked like a
self-assured but unassuming guy who originally hailed from Queens,
which he was. Word spread quickly in Yahoo's headquarters in
Sunnyvale, Calif., that - horrors! - he even wore a gold chain on his
wrist. (This, too, was true, but the chain is not a fashion statement;
it's a medical bracelet for a shellfish allergy.)

The story line at Yahoo is much different today. Having lost $98
million on revenue of $717 million in the year when Mr. Semel joined
it, Yahoo earned $1.2 billion last year on sales of $5.3 billion.
With a market capitalization nudging $50 billion, it is worth roughly
the same as the newly Pixar-ized Walt Disney Company or the combined
value of the recently split Viacom and CBS.

Dollars aside, Yahoo has the widest global reach of any Internet
site. It counts more than 420 million registered users around the
world, and it owns the most-used e-mail, instant-messaging and music
Web sites on the planet. In the United States alone, Yahoo attracted
103 million unique visitors in December, making it the country's
most-visited Web destination, according to Nielsen NetRatings.

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