• by Gavin O'Malley  @mp_gavin, June 20, 2007

Agency executives are hardly mourning the loss of Terry Semel. The heightened risk of a Yahoo merger, however, brings many of them to tears.

"Consolidation is obviously problematic because it allows the remaining players to drive up prices while driving down service," said Mark Egan, account director for the Media Contacts division of MPG. "It's going to be harder to make big publishers come to the table."

Said Sean Finnegan, U.S. director of OMD Digital: "The intuitive thinking behind consolidation is a simple thinking. The dollars flow to the portals, yes--but our end game is in understanding what the consumer wants no matter where they are."

Semel's dethroning, meanwhile, seems to mean little to Madison Avenue.

"One man doesn't make the organization," said Finnegan. "Yahoo has a tremendous amount of strength, and just because one person isn't right for the job doesn't mean the job can't be done."

"Semel's not someone who visited the agencies very much," remarked Sarah Fay, U.S. president of Isobar, Aegis' digital network. "These changes have a lot more to do with Wall Street than they do with Madison Ave."

Still, Fay and others seem to be in line with the broader consensus that Semel's time was up.

"Semel was there to bring process and corporate governance, but somewhere in there they lost their juice," said Fay. "[Jerry] Yang is great marketing because he's seen as the brainchild, and getting back to the company's roots."