Yahoo!, the world's most visited internet portal, yesterday appointed a veteran film studio boss as its chairman and chief executive, prompting speculation about a change of direction for a company founded by two students.
The appointment of Terry Semel, former co-head of the Warner Brothers film studio, marks a departure for the once high-flying internet company which has suffered from the sharp downturn in online advertising over the past year.
Mr Semel, 58, will replace Tim Koogle, the former communications industry executive who announced his decision to step down a month ago.
Mr Koogle, known as TK in the company, had intended to remain as chairman but yesterday's statement said that he would take on a "transitional role" of vice-chairman until August. The 49-year-old executive, who joined Yahoo! in 1995 and was named one of the world's top 25 executives by BusinessWeek magazine four years later, will remain as a board director.
Analysts said yesterday that the appointment of Mr Semel underlined Yahoo's desire to become a mainstream media company. It could also presage further acquisitions and alliances for one of the few profitable internet businesses.
Jordan Rohan, analyst at Wit SoundView, said the choice of "somebody ... ingrained in old media for so long" was surprising. "It does suggest a different direction for Yahoo!, one where they create content."
Shares in Yahoo!, which attracts more than 57m visitors to its site each month, edged down in a weak market to just over $17 (£11.85) yesterday. They have fallen more than 90% in value over the past year as doubts about the internet were followed by fears of a slowing economy.
A 24-year veteran of Warner Brothers, Mr Semel was credited with increasing earnings at the studio from $100m to more than $1bn by the time he and his partner, Bob Daly, left in 1999. The film studio was profitable in 19 of his 20 years in charge and ranked as number one or two in terms of box office takings.
He and Mr Daly left after several years of expensive box office flops such as Stanley Kubrick's Eyes Wide Shut. Mr Semel subsequently founded Windsor Media, an advisory business.
In a statement yesterday he said: "Yahoo! is a company with incredible potential ... The opportunities for combining traditional marketing and media with the interactivity of the internet are extraordinary. I look forward to applying my background to help Yahoo! successfully leverage both."
One analyst said Mr Semel's expertise in the entertainment industry would propel it into looking more closely at delivering new types of media over the internet.
The details of Mr Semel's pay package were not revealed yesterday. He bought 1m shares as part of his agreement to join by May 1. Mr Koogle earned $310,000 in salary alone last year.
Founders and "chief Yahoos!" Jerry Yang and David Filo have an 8% stake in the company.
Yahoo has been rocked by several executive departures in recent months, including the head of its European operations. President and chief operating officer Jeff Mallett and chief financial officer Susan Decker will continue in their roles, reporting to Mr Semel.
