After what may have been the weakest show of support for the company's executive team in last week's shareholders' meeting, Terry Semel has resigned the post of CEO of Yahoo this afternoon, as has accepted the post of non-executive chairman of the company's board of directors. The company's co-founder and "co-chief Yahoo," Jerry Yang will take Semel's place, in a move apparently intended to return the company to its roots as a pioneer of Internet technologies.

Semel's departure marks another failure for former media executives at the helm of Internet companies, having spent nearly a quarter-century prior to Yahoo at Warner Bros., most recently as co-CEO.

Though details from the shareholders' meeting remain intentionally sketchy, reports state that one of the company's directors received only 33% shareholder proxy support, whereas another received 66%. And while Semel could very well have had the two-thirds vote, even that number is not comfortably high. In another resolution last week, 35% of proxies were voted in favor of tying executive pay to corporate performance. While that vote failed, that's a substantially high percentage for any company.

“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 twelve years,” reads a statement released this afternoon by Ed Kozel, former CTO of Cisco Systems and current CEO of Skywriter, speaking on behalf of Yahoo’s board of directors, of which he’s a member.

“Jerry provides phenomenal strategic, technical, product and market leadership, has developed important relationships with major business partners, and has defined and nurtured Yahoo's unique, winning culture,” Kozel continues. As the public face of Yahoo, Jerry has been instrumental in attracting world-class talent to the company at all levels.”

In an open letter to Semel, Kozel also wrote the following, information-rich statement: “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.”

Assuming these events happened in sequence as Kozel indicated, Semel’s desire to step back may not have originated with himself.

In his farewell letter to the Board of Directors today, Semel wrote, “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.”

Substantial, perhaps, though not extraordinary. Though Semel may have helped stem a turnaround for Yahoo, it never really took off. Fiscal 2006 saw a 22% increase in revenue over the prior year, but a colossal 60% decrease in net income. Both trends appeared to level off somewhat in the fiscal first quarter of 2007: a 6.6% gain in revenue year-over-year, coupled with an 11% decline in net income. With that news last April came Semel’s trademark optimism, though it was taking on the pre-packaged appearance of the company’s own smiling logo: “With this powerful combination [of increased value for advertisers plus quality content, we believe that Yahoo! is well positioned to capture the major growth opportunities we see ahead for the future.”

Corporate turmoil perhaps reached its peak at this time last year, with as many as 17 executives having left the company within the first six months. The New York Times was prompted to publish a pinnacle article, which begins with major company investor Eric Jackson calling for new blood to lead the company.

With one of the company’s own summer employee picnics having famously leased an inflatable Titanic water slide, and with pictures of the sinking Titanic over the Yahoo campus plastered all over the Web, the company’s senior vice president, Brad Garlinghouse, wrote what historians may yet come to view as one of the most influential corporate memos in the history of American business: the now-classic Peanut Butter Manifesto, referring to an analogy of a company spreading a thin veneer of good cheer over its myriad problems.

“We lack clarity of ownership and accountability,” Garlinghouse wrote, in a memo that may very well apply to any number of corporations. “The most painful manifestation of this is the massive redundancy that exists throughout the organization. We now operate in an organizational structure - admittedly created with the best of intentions - that has become overly bureaucratic. For far too many employees, there is another person with dramatically similar and overlapping responsibilities. This slows us down and burdens the company with unnecessary costs.”

Those unnecessary costs continue to be demonstrated with increasing expenses and costs of doing business, over and above those incurred from recent acquisitions. Some attributed that bureaucracy as a kind of Hollywood mentality applied to a Silicon Valley organization.

The peanutty veneer began to crust and flake off of Yahoo the month after Garlinghouse’s memo was “leaked.” Media Group head Lloyd Braun, the once-ousted chairman of ABC Entertainment Television, was ousted from Yahoo after a series of public embarrassments that culminated in a media industry speech that made some observers question his own mental health. Observers and insiders believed that there were multiple factions forming within the company, Braun’s having been one, Semel’s another, and Yang’s a third.

After Braun’s departure, one of Yahoo’s more celebrated employees, then-CFO Susan Decker, was “reassigned” in a move that was made to look like a promotion, but which reeked of peanut butter. Some believed they heard the telltale sound of a head striking a glass ceiling. Now that Semel is leaving, Decker has received a real promotion: to president of the company.

“In our new President Sue Decker, Jerry has the perfect partner,” board member Ed Kozel writes, clearly indicating which faction she belonged to. “Sue was an outstanding CFO, has played a key strategic role as part of our senior management team, and in her growing operational role, has had enormous success as well. We are confident we have the right team in place to realize the enormous opportunities ahead.”

Trading in Yahoo shares on the NASDAQ exchange jumped sharply just after 2:30 pm ET, when the first word of Semel’s move hit the street. Share value jumped over 3% in active trading over yesterday to $28.12 per share, with after-hours’ trading value climbing another 1%.

UPDATE 6:45 pm ET June 18, 2007 - After Ed Kozel stated of new Yahoo CEO Jerry Yang that there's "no better person in the world to run Yahoo" and called new President Susan Decker "the perfect partner," and after ousted Yahoo CEO Terry Semel called Yang and Decker "the perfect combination to carry us forward," in a statement on his personal blog early this evening, Yang said, "I also couldn’t ask for a better partner in Sue Decker as our new president."

The three statements taken together could raise questions with regard to who - or perhaps what - is responsible for Yahoo's public sentiments. (Perhaps they're taking part in one of Google's betas of semantics processors.)

Yang went on to say, "I have absolute conviction about Yahoo!’s potential for long-term success as an Internet leader. Yahoo! is a company that started with a vision and a dream and, make no mistake, that dream is very much alive. I’m committed to doing whatever it takes to transform Yahoo! into an even greater success in the future...The time for me is right. The time is now. The Internet is still young, the opportunities ahead are tremendous, and I’m ready to rally our nearly 12,000 Yahoos around the world to help seize them. Go Yahoo!"