Yahoo! Inc. named veteran Warner Bros. executive Terry S. Semel as its new chief executive and chairman, hoping the former leader of a traditional media company can help the struggling Internet portal.
Current chairman and CEO Tim Koogle will be named vice chairman, a position he is expected to retain until August, and will continue after that on Yahoo's board of directors, the company said Tuesday.
The news comes as Yahoo scrambles to cope with the downturn in the economy and a huge drop in Internet advertising. Earlier this month, Yahoo posted its second straight net loss $11.5 million in the first quarter, or 2 cents a share, compared with a profit of $67.6 million, or 11 cents per share, in the comparable period of 2000 and said it is cutting 12 percent of its work force.
Yahoo's stock price has also suffered, with shares trading down 7 cents to $17.55 at midday Tuesday on the NASDAQ Stock Market, well off the company's 52-week high of $150 reached last June.
Koogle said last month he would step aside as CEO to broaden the company's management team, though he had been expected to remain as chairman.
President and chief operating officer Jeff Mallett and chief financial officer Susan Decker will continue in their current jobs to, reporting Semel.
"Yahoo is a company with incredible potential," Semel said in a statement.
"Yahoo's management team has rapidly and successfully built an industry-leading global company with the world's largest audience, a strong brand and a talented employee base, and I am proud to be leading the team that is going to enable Yahoo to achieve its next level of growth."
Semel and partner Robert Daly helped turn Warner Bros. into one of the world's largest media and entertainment enterprises during Semel's 24 years with the company.
They are credited with building the company from a single revenue source generating less than $1 billion to nearly $11 billion total revenues from diverse businesses in 50 countries worldwide.
Under their leadership, Warner Bros. achieved 18 consecutive years of record profits and revenues.
The choice of someone with a background in traditional media content was surprising -- "a little bit out of the box," said ABN Amro Inc. analyst Arthur Newman.
"The issue Yahoo needs to address is more on the advertising side, convincing advertisers to spend their money, rather than on the content side," Newman said.
"Yahoo already has excellent content."
Yahoo also said Semel bought 1 million shares of Yahoo common stock from the company in a private placement transaction.
By Brian Bergstein
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