Struggling Yahoo's Leadership Challenged

From the AP:

Associated Press
Jun. 9, 2007 12:00 AM

SAN FRANCISCO - Just before Google Inc. went public nearly three years ago, Yahoo Inc. Chairman Terry Semel assured a roomful of analysts and money managers that his company would remain the Internet's brightest star. To punctuate his high hopes, Frank Sinatra's The Best Is Yet to Come played in the background.

Google has so thoroughly eclipsed its rival since then that a growing contingent of Yahoo shareholders believes the company would be better off without Semel, who could face a chorus of discontent when he takes the stage at Yahoo's annual shareholders meeting Tuesday.

Even as it has struggled, Yahoo has continued to pay Semel like a rock star, yet another sore point for frustrated shareholders.
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"The company is drifting," said Eric Jackson, who intends to confront Semel during the meeting on behalf of about 80 Yahoo stockholders who own 2 million shares in the Sunnyvale-based company. "And its problems ultimately lie at Terry's feet."

Although the stake held by Jackson's group represents less than 0.2 percent of Yahoo's stock, the shareholder misery is widespread, said Standard and Poor's equity analyst Scott Kessler.

Shareholders are exasperated largely because Yahoo has seemed to be meandering while online search leader Google has been stampeding farther ahead. "It's frustrating because you can see so much unlocked potential in the company," Jackson said. "If it were managed in the right way, this company could be worth $150 billion."

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