Now social-networking sites like MySpace and Facebook are grabbing away Yahoo users and advertisers, and analysts say that average time spent on Yahoo is declining. Workers inside Yahoo describe it as a bureacratic mess that a reorganization in December has thus far not straightened out.

Employees are fleeing. Over the past year, eight of the company's top 26 executives have up and left. Some were shoved out in the reorganization, but others have quit. The company's top technology officer, Farzad Nazem, "retired" in June. More worrisome has been the diaspora of talent a level or two down. Departures from those ranks have included music chief Dave Goldberg, head of the consumer search business Andrew Braccia, and Yahoo HotJobs general manager Dan Finnigan.

Dozens of refugees have set up camp at Google, Microsoft, and Facebook and at venture capital firms such as Benchmark, Sequoia, and Accel Partners. Others are starting new companies.

Fearful of their futures, many Yahoo employees were not willing to talk about the company on the record. They're worried getting laid off, and for good reason. Semel has finally acknowledged a surfeit of duplicate projects at Yahoo and an intention to cut them back. Revenue per employee at Google last year was $1.3 million; at Yahoo, $606,000.

Perhaps all this turmoil explains the dissident shareholders' problems with Semel. To his cheerleaders, the 325 percent run-up in Yahoo stock in 2003 and 2004 justifies his worth. To detractors, Semel was just lucky, and the miserable drop in Yahoo's stock price since then is a better indicator of his talent.

It's impossible to know how much of Semel's early success resulted from the considerable recovery in internet advertising during that period and how much came from executive brilliance. There is little debate, however, that someone at the company has been asleep at the wheel for at least the last two years, and the question now is whether Semel can rouse the company from its self-induced torpor.