Semel's biggest oversight - the audience

Maybe the children should rule the roost. Facebook's 23-year-old Mark Zuckerberg certainly seems to be doing fine at the helm.

 

Terry Semel resigned from his CEO post at Yahoo on Monday, about six years after being brought in to provide adult supervision. Co-founder Jerry Yang has been bumped up to interim CEO.

 

It's really not a surprise that Semel left. His departure was really teed up back in December 2006 when the Internet company went through a restructuring that raised Sue Decker to a position pretty close to overseeing Yahoo. Now she's president. Read my post: Yahoo dispels first-mover myth. It was already pretty clear that Semel's days were numbered. Yahoo's stock price is the closest thing to an approval-ratings poll. Yahoo's stock went from $43 at the start of the year to $28 today. What's more, this performance was amid a time Yahoo generated the most pageviews of all companies, even Google, and Internet advertising rose 19%.

 

So, the question for me regarding his departure is not why now, or why so sudden, but rather why did it take so long?   

 

After all, there were naysayers (myself included) who were very skeptical as soon as he came on board back in 2001. Despite his experience as a successful Hollywood executive and his nice demeanor, with all due respect, he just wasn't right. Here's what he said back in 2001: "Our new attitude is how can we put you in front of our customer... You own something, you have a great leg-up. What we have is a terrific audience. That's our speech to the world." What that vision implied was that Yahoo would set itself on course to focus far more on capitalizing on its audience, rather than serving it.

 

That was Semel's biggest oversight: Understanding and growing with the ever-sophisticated, curious, controlling, fickle, creative, and demanding Internet audience. He was a man of traditional media stripes trying to apply Hollywood ways to a new world. He wanted to create top-down content for the new-media platform. The problem was, he didn't see that audience that Yahoo had (and the future audience on the Internet) were destined to create it. 

  

He hardly was someone who could offer up a fresh perspective.  And, that's what Yahoo needed - either a technologist, like Google's Eric Schmidt, obsessed with creating products to serve the user or someone young, like Zuckerberg, with no engrained habits of how the media world should be.

 

I don't buy that Semel failed to appreciate Internet search, leaving Google to run away with it. Search wasn't Yahoo's focus for many years, well before Semel came on board. What Semel failed to do was to understand and organize Yahoo's audience. It probably shouldn't come as a surprise that two of the hottest Internet companies are run by a technologist and a former psychology major.