• by Terry Semel , June 19, 2007

Letter from Terry Semel to the Yahoo! Board of Directors

Dear Fellow Board Members:

I am incredibly proud to have led Yahoo! these past six years, and I want to thank the Board for the opportunity to serve such a pioneering company during this exciting, still early stage of the Internet's development.

Since the day I arrived in Sunnyvale in the spring of 2001, I've been fortunate to work with some of the most remarkable, innovative and dedicated people I've ever known. At that time, following a collapse in Internet advertising, Yahoo! was facing severe challenges. But since then, by working together, the people of this great company have been able to achieve extraordinary growth and deliver substantial value to our shareholders.

Today, we are again addressing challenges created by dramatic changes in the needs of audiences and advertisers. And of course none of us is at all satisfied with the company's recent financial performance. Despite these difficulties, however, Yahoo! continues to have tremendous fundamental strengths. We remain the leader in Internet advertising and a powerful competitive force in markets around the globe. In addition, we have achieved a great deal over the past several months, such as our recent successful launch of our critical new Panama search marketing platform, which puts us in a strong position to shape a very bright future for Yahoo!.

As you know, we have long talked about the importance of ensuring a smooth succession in Yahoo!'s senior leadership -- and more recently, about the need for a leadership team committed to carrying Yahoo! through its multi-year transformation. As we discussed my future goals and plans, I was clear in telling you of my desire to take a step back sooner rather than later. I know we all agree that Jerry and Sue, with their superb talents and intense dedication to Yahoo! and its people, are the perfect combination to carry us forward. This is the time for new executive leadership, with different skills and strengths, to step in and drive the company to realize its full potential -- it is the right thing to do, and the right time is now.

Jerry and Sue will make an unbeatable team. Jerry has long been recognized as an Internet visionary. His incredible experience and close involvement since founding the company 12 years ago have given him unique insight about the industry and unparalleled knowledge and understanding of Yahoo! and its potential. We are equally fortunate to have Sue Decker, one of the most talented executives in the industry, as our new President. Since joining Yahoo! seven years ago, Sue has taken on an increasingly broad and important role in driving our strategy, and she's shown even greater skill and leadership as she's taken on more operating responsibilities in the last eighteen months. No promotion could be more well-deserved. Jerry and Sue have been great partners to me, and I am excited to have the opportunity to continue working with the management team and the rest of the Board in my new role as non-executive Chairman.

I am a huge believer in Yahoo! and its people. We have a unique array of audience, advertising and technology assets that will become even more valuable as the Internet continues its rapid growth. And, I have no doubt that, with its new leadership team, Yahoo! will realize its enormous potential.

Sincerely,
Terry Semel