Business Week

Yahoo! Act Two


After leading a gritty turnaround, CEO Terry Semel is thinking big. So is the competition. When Terry S. Semel walked into the Sunnyvale (Calif.) headquarters of Yahoo! (YHOO ) Inc. for his first day as chief executive on May 1, 2001, he faced an unenviable task. Ad sales at the Internet icon were plummeting, and the new CEO was replacing the well-liked Timothy Koogle, who had been pushed aside by the company's board. Worse, leery employees quickly saw that Semel, a retired Hollywood exec, didn't know Internet technology and looked stiffly out of place at Yahoo's playful, egalitarian headquarters. Would this guy tour the Valley in the purple Yahoo car, as Koogle did, or play a Yahoo kazoo? Fat chance. And instead of bunking in nearby Atherton or Palo Alto, like other Silicon Valley execs, he rode off every evening in a chauffeured SUV to a luxury suite at San Francisco's Four Seasons Hotel.