Yahoo! in Trouble

The deal ultimately went through for $ 85 billion in stock. Soon there were rumors in the market that Yahoo with the help of its huge market capitalization was also planning to acquire a traditional media company. Yahoo's board comprising Koogle, President Jeffrey Mallett and Yang discussed the acquisition issue. However, they reached a consensus that Yahoo would not follow AOL's footsteps. Media reports however revealed that though Koogle was interested in acquisitions, Mallet had opposed the move and convinced Yang as well. The incident led to widespread rumors of infighting within the top management of the portal. According to a source in the company, Mallett who was in charge of running daily operations fancied the CEO position...

Semel agreed to take the job with the condition that Koogle should leave the Chairman post. Semel joined Yahoo on May 1, 2001, bringing with him an experience of over 24 years at Warner Brothers (Refer Exhibit II). Analysts seemed to be divided on Semel's selection as Yahoo's CEO. Though he was very successful in running Warner's movie business, he failed to deliver when his duties were expanded to include music and amusement park businesses. He was unable to turn Warner's websites into moneymakers and had little experience with advertising. According to an analyst Scott Reamer of SG Cowen Securities Corp, "Semel's not a turnaround expert. And he doesn't know how to sell to large advertisers. He has extensive experience running a media company and that's what matters..."