Yahoo announced Monday that its board of directors had voted in founder Jerry Yang as chief executive.
Current Chairman and CEO Terry Semel, who joined the company in 2001, will step aside to assume the advisory role of nonexecutive chairman.
“This is the time for new executive leadership, with different skills and strengths, to step in and drive the company to realize its full potential—it is the right thing to do, and the right time is now," CEO Terry Semel said in a statement.
The move comes after Yahoo shareholders last week issued a weaker vote of confidence in the company’s board of directors and its executive compensation, giving only a 66 percent approval compared with 97 percent last year.
Wall Street had been increasingly grumbling for Mr. Semel’s head. The placement of Mr. Yang as CEO, however, was seen as only a temporary fix by at least one analyst.
“The past year has been a difficult one for Yahoo and I know none of us have been satisfied with Yahoo’s recent financial performance,” Mr. Semel said in a conference call.
Discontent with Mr. Semel’s helmsmanship had been brewing for months over the company’s stock price and Yahoo’s bruises from rivals. Google, MSN, and AOL had all been quietly assembling businesses beyond the portal model, said Shahid Khan, partner at Interactive Broadband Consulting Group.
“Google came in with better technology, and AOL and MSN came in with better services,” he said.
Yahoo also repeatedly came out on the losing end of a number of high-profile acquisitions. “That was the last nail in the coffin,” Mr. Khan said.
Yahoo’s board also named Susan Decker, formerly the head of the Advertiser and Publisher Group, as president.
A number of top executives left the company in December, after Mr. Semel reorganized Yahoo into three units: Technology; Advertiser and Publisher; and Audience, or content. Since then, Yahoo has struggled to find a leader for the audience group. It’s also searching for a head for the technology group after Farzad Nazem left last month. Mr. Nazem had been at Yahoo for 11 years.
Now Yahoo is looking at further reorganization. Ms. Decker will head both the Advertiser and Publisher Group and the Audience group, which she’ll fold together under her leadership, she said in the conference call.
Though Ms. Decker is not making a rumored move into the CEO chair, the consolidation of the two major units under her control still indicates a growing role in the company.
Ms. Decker said the reorganization into three units streamlined operations, and she cited the shutdown of Yahoo Photos in favor of popular photo-sharing site Flickr and the shutdown of Yahoo’s U.S. auction site.
Yahoo’s long-awaited—and delayed—Panama search advertising platform has already yielded double-digit growth per search, a growth rate not expected until the end of this year, Ms. Decker added. Rival Google shot ahead of Yahoo in past years on the basis of making far more money per individual search than Yahoo.
Mr. Yang tried to downplay the rumors that have circulated in recent months about Yahoo being acquired. “The board and I believe Yahoo will be… a vibrant independent company,” he said. “We intend not merely to be competitive but an even bigger winner in our industry.”