Semel Excuses Himself From the Fray

Somewhat overlooked amid the news of Microsoft's bold bid to take over Yahoo, is the quiet exit of Terry Semel, Yahoo's nonexecutive chairman and its former chief executive.

The timing is somewhat curious given that Yahoo made the announcement on Thursday night, roughly about when its top executives knew that Microsoft would be announcing an offer this morning.

But the company's statement said that Semel had intended to step down after January's board meeting and had begun discussions with the board about his departure several months ago.

Semel had been a highly regarded Hollywood executive, helping run Warner Bros. studio, when he became C.E.O. of Yahoo in 2001. Last June, after Yahoo had fallen far behind Google in search adverising, he was forced out as chief and replaced by cofounder Jerry Yang.

But perhaps Semel, 64, no longer had the stomach for negotiating a deal - or continuing to oppose one.

Miguel Helft and Andrew Ross Sorkin of the New York Times report that Semel had met with Steve Ballmer, the chief executive of Microsoft, several times in late 2006 and 2007.

"While the talks -- originally focused on the prospect of a merger or a joint venture -- were initially constructive and appeared to move forward, they quickly broke down," the Times says, citing people involved in the talks.

Kara Swisher on her BoomTown blog says that Microsoft made overtures to Yahoo as recently as Tuesday evening, after Yahoo reported disappointing quarterly earnings, according to "sources at Yahoo."

Friday's announcement by Microsoft "was essentially a hostile move," she says.

Yahoo's new chairman is Roy Bostock, a longtime board member. Bostock, notes the Times' DealBook, has had experience in corporate sales: he served as chairman of advertising agency D'Arcy Masius Benton & Bowles before it was sold.