• by Tameka Kee , June 18, 2007

Yahoo's new CEO -- co-founder Jerry Yang -- sought to galvanize investors during the press conference announcing his appointment with six words: "I am ready for the challenge."

Yang defined the key challenges that the Web giant continues to grapple with: from an underperforming search monetization platform, to the ever-increasing spate of rivals for its share of user traffic, to the "competition for our talent" that has led to employee attrition. He also laid out a road map for how the company would move forward.

Yang will have a formidable partner to lead Yahoo through its multi-year expansion plan, as former executive vice president Sue Decker now assumes the role of president. In her new role, Decker will continue to build the partnerships that are integral to Yahoo's growth strategy (such as a display advertising deal with Comcast), and will further implement the company's operational reorganization that began last year under Terry Semel, who announced his resignation after the market closed.

Yesterday's announcement ended months of speculation on whether Semel would keep his position as CEO amidst Yahoo's struggles with sub-par earnings forecasts, the loss of senior management personnel, and the relentless industry perception that it's always a step behind Google.

Semel countered those theories indirectly in his public resignation letter and statement, saying: "I've been clear in my desire to take a step back from an executive role, sooner rather than later. I've long been talking to the Board about ensuring a smooth succession--and the need for a leadership team committed to leading Yahoo through its multi-year transformation."

The management change highlighted a possible reason why Yang delicately evaded questions during last week's shareholder meeting about whether he would assume the role of CTO. But it raised new queries among investors and market analysts, who sought to quantify how technology investment would factor into the company's forward-thinking plans, as well as how Yang would handle the ongoing search for a new CTO.

The blogosphere yesterday raised questions about why Yang was chosen in lieu of Decker (who was widely believed to be in line for the CEO role)--but the most interesting feedback may have been from Yahoo employees themselves.

For example, minutes after the press conference, sites such as Valleywag had employees wondering "why we read about this change in the media before the management had even bothered to send an email out to the employees and shareholders ..."

With acquiring and retaining key talent now one of Yang's primary focal points, perhaps fewer "Yahoos" will have to publicly ponder their company's strategies in the future.

Both Yang and Decker promised more detailed operations insights, as well as positive expectations for July's 2Q 07 earnings call, including possible double-digit revenue per search gains.

Semel, 64, will remain chairman in a non-executive role after spending the past six years running the company.

Monday's shake-up unfolded less than a week after Semel faced off with shareholders disillusioned with a nearly 30% drop in Yahoo's stock price during the past 18 months as the company's financial growth fell further behind Google's torrid pace.

Yahoo's shares were up more than 4% in after-hours trading.