April 17, 2001 7:45 PM PDT
Semel: The new Yahoo on the block
On Tuesday, Yahoo announced that Semel will replace outgoing Chief Executive Tim Koogle after an executive search mounted less than two months ago. The move brings a media veteran with international experience and a self-proclaimed specialty in marketing to the helm of the troubled Internet bellwether.
It also puts Semel back in the hot seat about a year and half after he quit his job as co-head of Warner Bros., presumably to pursue a quieter life running an Internet investment firm.
In an interview Tuesday, Semel said he has not formulated any strategies yet for reversing Yahoo's fortunes, which have declined rapidly along with an industrywide advertising slump that shows no sign of letting up. But he said he believes strongly in Yahoo's brand and long-term position for a turnaround.
"I think Yahoo has great, strong core assets, and it was those assets that fascinated me and brought me to the table," Semel said. "I love building things and I will look forward to building those assets into a much larger and more diversified company throughout the world."
Taking responsibility for Yahoo at this time presents a formidable task. The company has seen revenue projections plunge and has endured a string of senior executive departures, largely from its international operations. Yahoo's management also has gained a reputation for being especially tight-knit, potentially complicating the leadership graft.
Given the challenges, it's an open question whether Semel, 58, brings the right mix of talents and experience to the job. Though he's an executive with extensive experience in creating hit movies and records, some analysts have raised questions about his ability to rebuild Yahoo's flagging advertising sales.
Yahoo has been the subject of takeover rumors for months, with media giant Walt Disney being named as a leading suitor. The appointment of Semel--a Hollywood veteran with strong media ties--once again raised the question of a possible sale of the company.
Those close to Semel say he did not accept the job to prepare Yahoo for sale but add that he relishes the chance to bring the company through its troubles.
"Terry was not looking for a job, he was looking for a challenge," said Bob Daly, a close friend who shared co-CEO responsibilities with Semel at Warner Bros. "He did not want to go into a company to get it dressed up and sold."
Semel's career in entertainment began in 1965 when he joined Warner Bros. as a sales trainee for its film distribution business. He stayed on until 1972, when he switched jobs to become president of CBS' theatrical and marketing distribution and then president of a similar division at Disney in 1973.
Meta Group says Terry Semel is taking over a company with huge potential but one that is also trapped by its own success.
Semel returned to Warner Bros. after his stint at Disney and in 1978 became the executive vice president and chief operating officer. In 1980 he was appointed vice chairman and COO of the company, a position he served in until 1994, when we has promoted to co-chairman and co-CEO in 1994 alongside Daly.
The relationship between Daly and Semel was tight. Semel described Daly as his "best friend" during a conference call with reporters Tuesday. The two became known as a power duo in Hollywood creating notable studio hits such as "The Matrix," "Batman" and "Lethal Weapon."
Of course, they were also responsible for some notable flops, including "Wild Wild West" and "The Avengers," during a considerable drought of hit films until "The Matrix."
Semel also spearheaded Warner Bros.' push into the international market during his more than two decades at the company. Yahoo has been pushing aggressively into international markets but has recently suffered an executive exodus in Europe and Asia.
"Indeed, I think if one were to say to me, 'What is (your) background?' my background is marketing," Semel said during the conference call. "I've been brand building throughout the world for the last 25 years."
End of an era
In September 1999, Semel and Daly squished their hands and feet into wet concrete outside Hollywood's legendary Mann Chinese Theater. With the executives forever immortalized in Hollywood lore, the ceremony was symbolic. It was also the last day of work for the two at Warner Bros.
The pair left on good terms and pursued other interests. Daly went on to buy a controlling stake in the Los Angeles Dodgers and is now managing partner and chairman of the team. Semel formed Windsor Media, an Internet investment and development company.
Since then, Semel says, he has become a student of the Internet.
"I decided to immerse myself in this world," Semel said Tuesday. "I got to look at 200 or 300 companies' plans and companies' objectives. I met with key execs at Internet companies around the world. Fundamentally, many of those companies needed ultimately to have people with media background who were involved in other products and other services with consumers."
Semel has been a strong political player as well. He is known for his contributions to the Democratic Party, former Vice President Al Gore's campaign, and Gore's former Democratic rival, Bill Bradley.
But in 1999, Semel invited then-Texas Gov. George W. Bush to his home as the guest of honor, according to Los Angeles Magazine. At the time, Semel was said to be angling for an ambassadorship appointment in the Bush administration.
According to Daly, Semel approached the Yahoo job cautiously.
The courtship with the company began informally last year, when Semel met Yahoo co-founder Jerry Yang at the Allen & Co. annual conference of media moguls in Sun Valley, Idaho.
Yang recently approached Semel with the job offer over lunch. Semel expressed interest but didn't immediately accept. Instead, as Daly described it, Semel entered a period of "due diligence" during which he met with Yahoo's board of directors and some senior executives in the company. Semel went so far as to fly to Japan to visit Masayoshi Son, the CEO of Softbank, one of Yahoo's largest shareholders.
Semel agreed to accept the position last week, Daly said.
In an interview, Yahoo co-founder Jerry Yang said that Semel's background in media is attractive, but emphasized that he took to the match in large part because of the fit in personality.
"One thing we looked at was his personal attributes," Yang said. "He's a guy that doesn't have a lot of ego, that builds great teams and lets the team take a lot of the credit. He's a guy who is able to be flexible and innovate and build business models on top of great brands. These are the things we look at in a person and a business leader."
One person who worked closely with Semel described him as enjoyable to work with within Warner Bros. But in Hollywood, he also developed a reputation as being someone who never returned phone calls and was commonly late to meetings. The source said that reputation was born out of Semel's emphasis on making contacts that mattered, and the ones that mattered he devoted much attention to--maybe too much--talking through his ideas without noticing the clock.
"Terry liked to talk," said the source, who asked not to be named. "When he got a concept going, he'd sit there and take all the time needed, so if it meant the next guy was late, the next guy was late."
Former and current colleagues also described Semel as a charismatic, low-key family man who garnered respect from many in the industry. His charm was sometimes complemented by an attitude that seemed standoffish to outsiders.
"He's a laid-back guy," Daly said. "He doesn't have a big ego, and his objective is to get something done. He likes smart people around him; he likes people to challenge him."