Terry Semel's Ghost Still Haunts Yahoo

The ghost of Terry Semel still hangs over Yahoo, as well as its financials.

Semel, who joined Yahoo in 2001 after 24 years of rising through the ranks at Warner Bros. studios, steered the company through hard times, eventually driving the stock to a record high of $43 in January 2006. Then his magic touch disappeared, and Yahoo lost ground to Google. He was released last summer with a handsome severance package.

But Yahoo is still paying him out that severance, and it's dragging on earnings at a time when the company can least afford it. Yahoo said today that it paid out $29 million to Semel in the March quarter.

On top of that, Yahoo paid another $16 million in laying off other employees. And the costs of consulting outside firms in rebuffing an aggressive takeover attempt by Microsoft in the quarter racked up another $14 million.

All told, the hard luck of late - measured in terms of severance, restructuring and Microsoft-related consulting - totaled $59 million. That's more than 4 percent of the net revenue Yahoo brought in this quarter. Add it back into the $141 million in net profit, and you have a profit that's 42% larger, equal to 15 cents or 16 cents a share - which is above the 11 cents Yahoo reported on a non-GAAP basis.