After angering shareholders with lackluster returns, Yahoo (YHOO) CEO Terry Semel is stepping down. After bringing Yahoo back from the brink of extinction, Semel was unable to find a coherent new strategy for the Web's most popular destination. Yahoo's problems have been apparent for quite some time. Outgunned by Google in search and increasingly by MySpace in online media, Semel could never quite find his footing. Over the past couple years, his Hollywood experiment to turn Yahoo into a Web studio went nowhere, he flubbed the chance to buy both Facebook and YouTube, and he oversaw an exodus of talent to startups and competitors alike.
In Semel's place, co-founder Jerry Yang will take the CEO reins. But expect that to be a temporary measure.
Also announced was the promotion of Susan Decker to president. Decker, Yahoo's former CFO who was put in charge of the new advertiser and publisher group just last December, is widely seen as the favorite for the top spot—if she can prove her chops in an operating role. As head of the advertiser group, she was in charge of Yahoo's new Panama advertising system, which is supposed to help it compete more effectively against Google. Now, she will be responsible for all of Yahoo's operations. If she can reignite growth, and the stock, that CEO title could become hers as well.
If she can't, then expect the board to find a new CEO from outside Yahoo. Or else to combine forces with Microsoft.