June 18, 2007 7:00 PM PDT

Is Yang right to run Yahoo?

Thirteen years ago, Jerry Yang was working on his doctoral degree in electrical engineering at Stanford University when he and fellow student David Filo created "Jerry Yang's Guide to the World Wide Web."

They left school to turn their little project into a company they called "Yahoo" and never looked back.

On Monday, Yang took over as the chief executive at Yahoo, replacing seasoned executive Terry Semel. Semel will assume the position of nonexecutive chairman and serve as an adviser to the management team and board of directors.

But is Yang, who ran the company when it was small but lacks Semel's management expertise and business sense, the right person for the top job at a company struggling to regain a foothold in search--and more importantly, lucrative search advertising--that was lost to Google?

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Analysts, former Yahoo employees and others say "yes," but only with newly named Yahoo President Sue Decker at his side. And some speculate that he's only filling the spot until Decker is ready to take the reins.

"Yang has got some strong backup, with Sue Decker as president," said Charlene Li, an analyst at Forrester Research. "The key thing he lacks is strong management experience of a large, complex organization...Semel brought discipline; now they need vision. (Yang) definitely has the credibility to do that."

Li added: "They had to do something. There was an attitude of 'anyone but Terry' at this point."

Greg Sterling, principal of consultancy Sterling Market Intelligence, speculated that Yang's new job will be temporary and that Decker is being groomed to become the permanent CEO.

"Yang is a known commodity, and they're trying to reassure the market," Sterling said. "Probably, it's the case that he's the interim CEO...If they had brought in a rock star, that might have changed the dynamics of the company and prevented or delayed Decker's ascension to the ultimate CEO role."

Boomerang bosses

A company reorganization and management shuffle six months ago led many to surmise that Yahoo was grooming Decker to become CEO. Since then, she had continued serving as chief financial officer until the company recently named investment banker Blake Jorgensen as CFO. She was then free to assume the role she had been assigned during the shakeup late last year as head of the advertising business.

In the current reorganization, the advertising and consumer divisions will be integrated under Decker's leadership.

Yang is respected as Yahoo's co-founder and therefore holds influence. For example, he is involved in every executive decision at Yahoo, insiders say. More importantly, in this case, Yang--whose title is "chief Yahoo"--is considered a passionate user of the network and dedicated to a creating a good user experience. He's been responsible for numerous design overhauls on the Yahoo home page.

Yang's passion for Yahoo, industry watchers say, runs in stark contrast to Semel's, who isn't known to be an avid user of Yahoo specifically or the Internet in general.

"You couldn't get an outsider to understand the company better than Yang," said one executive, who spoke on the condition of anonymity. "He's been the voice of the user for a long time."

Decker described Yang as the "heart and soul of Yahoo" during a conference call discussing the changes.

CONTINUED: Decker on deck…
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5 comments

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Yang might be the right person.
Nobody else could have been perfect for this job than Yang. He is been in the industry for 12 years and has 4% share in the company. This should give him enough reasons to motivate him to do a turn-around for Yahoo!. think about Apple and Dell. It wasn't until their founders came back that they became industry leaders. Based on the exposure he would have gotten being the "chief yahoo" and working closely with top management; he would surely be able to do it.
Posted by niravabhavsar (74 comments )
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Another uninformed, racially biased article
Where the hell you came up with the conclusion that Yang "lacks Semel's management expertise and business sense". On what basis do you make this claim except for the fact that Yang doesn't neatly fit into your narrow perception of what a top manager should be? In other words "white"?
Posted by oxtail01 (308 comments )
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Uh...
I think they took this from some Forrester researcher named Charlene Li, who -- given the name -- I strongly doubt harbors anti-Asian feelings.

Where that analyst probably got it from, which is equally stupid, is that Yang is "only" a company founder and engineer, rather than a professional MBA-type. As far as I can see the only skill professional MBA-s seem to have is cashing large paychecks while "winding down" businesses others have created.
Posted by michaelo1966 (159 comments )
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Race is not an issue
Semel was co-CEO of Warner Brothers, where he worked for 24 years; he had management stints at other companies and serves on numerous boards; and at 64 has much more management experience than Yang, 38, who led Yahoo for a short while in its early days when it was much smaller. The same could be said of David Filo, who is caucasian.
Posted by elinormills (181 comments )
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