Jerry Yang isn't like Michael Dell, Steve Jobs and other high-profile executives who returned to rescue the companies they founded. Yang, Yahoo Inc.'s new chief executive, never left.
And that's part of his credibility problem -- not just with outside investors hoping for a more radical management shake-up than they got this week, but also with current and former employees who have felt frustrated as they've watched rivals start to eat Yahoo's lunch.
Several ex-Yahooers said that an aversion to risk and a quarter-to-quarter mentality had crept in as the company super-sized itself in recent years. As archrival Google Inc. grew to dominate the Internet-advertising business, Yahoo appeared to hesitate. As others pulled the trigger on acquisitions of dynamic Web companies -- Google bought YouTube, and News Corp. bought MySpace -- Yahoo seemed to deliberate too long. Whether or not Yang was running the company, such people said, it has happened on his watch.
Under heavy criticism from disappointed investors, Yahoo announced Monday that Yang, 38, had taken over as CEO from Terry Semel, 64, the veteran Hollywood executive who arrived in 2001 and helped refocus the company in the aftermath of the dot-com stock collapse. In Yang's first move, he tapped former chief financial officer and rising star Susan L. Decker as president to help him restore confidence among Wall Street, advertisers and employees.
Investors initially embraced the changes, bidding up Yahoo shares in after-hours trading Monday, soon after the announcement. But on Tuesday the stock dropped 49 cents to $27.63, partly because of analysts' cool reaction and partly because of the company's statement that it wanted to stay independent. Some investors had been hoping that Yahoo's turmoil might lead it to put itself up for auction.
"Jerry Yang is widely acknowledged as a visionary -- he built something out of nothing," Standard & Poor's analyst Scott Kessler said Tuesday. "But he's not really a manager and never has been, so there's a level of skepticism about this news."
Yang has long carried the title "chief Yahoo" and has been responsible for long-term strategy, not management, at the Sunnyvale, Calif.-based company. In fact, other than an administrative assistant, he has had no subordinates reporting to him, said a former executive who, like other ex-employees interviewed for this story, declined to be identified because they retained some personal or business ties to the company.
