The timing of the announcement may have come as a surprise, but the fact that Terry Semel resigned as chief executive officer of Yahoo Inc. this week wasn't a big shock. The Internet giant has been under fire for more than a year over what investors and analysts see as a lack of vision, and for its continued inability to compete with Google Inc. on the search and advertising fronts.
But will getting rid of its CEO help Yahoo improve all of that?
It might have if the company had replaced Mr. Semel - who was a transplant from the Hollywood side of the media business - with someone who could rally the troops and somehow turn the ship around.
Instead, however, the company went with Jerry Yang, one of the original co-founders of the company. This seems like an odd choice for a number of reasons.
It's not that Mr. Yang - who started the company with his friend, David Filo, in 1994 while the two were at university - doesn't understand Yahoo.
After all, he has been there in the senior executive ranks (as one of two "chief Yahoos," along with Mr. Filo) as the company has evolved from a small search engine (much like Google was) into a media giant.
And he has, no doubt, watched with apprehension as Google has overtaken Yahoo as the king of search. To add insult to injury, Google has become the leader in online advertising by using search-related technology originally developed by Overture Services Inc., which Yahoo acquired in 2003.
Google has taken the lead in virtually every area that counts, including stock market valuation. The company's market capitalization is more than $160-billion (U.S.), which makes it more than four times the size of Yahoo, whose share price has fallen by about 30 per cent in the past 18 months. Even though Mr. Yang's stake in the company is still worth about $2-billion, that kind of thing has to rankle.
At the same time, however, Mr. Yang has never actually run anything at Yahoo, at least not since the company was a startup. He may be personally invested in Yahoo, but he doesn't have any actual operational experience, which might explain why investors haven't reacted with cheers of joy to his ascension.
When Steve Jobs returned to Apple Inc. and took over management of the company, there were some skeptics, but it quickly became clear Mr. Jobs had a strong vision of what he wanted Apple to be. It's not clear what Mr. Yang's vision of Yahoo is, or whether it's the kind of vision that can make the company a strong competitor.
Part of the problem is that no one knows exactly how to compete with Google. Should Yahoo give up the search-related advertising battle and focus its efforts elsewhere? Or should it double down on that bet and add more strength through acquisitions, or pursue something that Google lacks, such as "natural language" search? Should it buy Facebook, which it reportedly tried and failed to buy last year for about $1-billion?
There have even been rumours that Yahoo has discussed a partnership with, or even an outright acquisition by, Microsoft Corp. And, according to one report, Yahoo was approached by News Corp.'s Rupert Murdoch about merging with the media conglomerate's MySpace unit.
One of the most radical visions for Yahoo involves getting out of the search business altogether to focus on the media assets and other services it has, since Google doesn't really compete in that arena.
There is still hope for Yahoo, of course. The company may have lost a lot of ground to Google, but its new ad platform, code named Panama, has reportedly been performing well and could help make up some of that ground.
The company is also still a strong second-place contender in the online ad business, with Microsoft a distant third. If you're a company that doesn't want to put all your online advertising eggs in the Google basket, then Yahoo is the obvious choice. That has to be worth something - and if Yahoo is smart, it will build on that.
Whether Jerry Yang is the best person to do that kind of building, or to set Yahoo on the path to recovery, is the multibillion-dollar question.