• by Ed Kozel , June 19, 2007

Letter from Ed Kozel, on behalf of the Yahoo! Board of Directors, to Terry Semel

Dear Terry,

For the past six years, you've played an incredibly vital role in making Yahoo! the Internet leader it is today. You've always done what you think is best for Yahoo!, its people and its shareholders, and we understand your view that now is the right time for a new team to lead Yahoo! forward as it embarks on its next phase of growth. In our conversations about succession planning, we've discussed the need for a leadership team committed to carrying Yahoo! through this multi-year transformation, and you've indicated your own desire to take a step back from the CEO role in a shorter rather longer time horizon. As a result, we all agree that the time for a change is now. We are incredibly fortunate to have -- with Jerry and Sue -- two uniquely gifted executives who are exactly what the company needs to build on the progress we've made in recent months. And, we appreciate your willingness to serve as non-executive Chairman and be an advisor and important resource for this new management team, while also continuing to work closely with the Board.

Yahoo! has achieved much during your time here. When you joined the company in 2001, you helped refocus Yahoo! on key strategic priorities and execute clear plans for growth, while building and acquiring world-class products and properties. Under your leadership, we have delivered great value to our users, advertisers and shareholders -- increasing our revenues nearly nine-fold since 2001 to $6.4 billion for 2006, boosting our operating income from a loss in 2001 to nearly $1 billion last year, and creating more than $30 billion in shareholder value during your tenure. We've also built our industry-leading audience from 170 million users in 2001 to more than 500 million this year, and significantly expanded our strong and talented employee base from 3,500 to 12,000.

The past year has obviously been a difficult one for Yahoo! But the company has made important progress in laying a firm foundation for future success and improved financial performance. These efforts include the successful launch of our new Panama search advertising platform; new strategic partnerships with major media and Internet companies; a number of value- creating investments and acquisitions; and strengthening Yahoo!'s position in the emerging growth areas of social media, video and mobile. We will capitalize on these many achievements as Yahoo! embarks on its next phase of growth.

We believe there is no better person in the world to run Yahoo! now than our visionary co-founder Jerry Yang, who has helped build and run this company over the past 12 years. Jerry provides phenomenal strategic, technical, product and market leadership, and has developed important relationships with major business partners around the globe. He has defined and nurtured Yahoo!'s unique culture, and has helped bring some of the top talent in our industry to Yahoo!. In our new President, Sue Decker, Jerry has the perfect partner. Sue has long been a key leader within the company, and as she has assumed broader operational responsibilities, she has demonstrated her ability to build successful teams, forge critical partnerships and drive some of our most critical business initiatives.

With Jerry and Sue working with you and the rest of the Board to realize our strategic vision by accelerating execution and further strengthening our leadership, we are confident we have the right team in place to capitalize on the enormous opportunities ahead.

Sincerely, Ed Kozel