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For years Yahoo! (YHOO) has done pretty well for itself by ignoring outsiders' suggestions of what's best for the company. With the surprising choice for the company's new chief, let's see if the streak holds.

By naming respected Hollywood executive Terry Semel to head the company, Yahoo! has selected as chairman and CEO someone who has a track record of building a large, stable, money-making international organization within the extremely unstable and unpredictable movie industry. But, by selecting the former longtime co-CEO of

AOL Time Warner's


Warner Bros.

, Yahoo! has found a person whose background screams "culture clash" -- or at least "a period of readjustment."

In either case, the company will need its new leader to quickly outline a compelling vision to attract talent and capitalize on the Web portal's name. Yahoo! has been

reeling in recent months, as several high-level executives have departed and a sharp slowdown in Internet advertising has punished financial results. The Semel news wasn't immediately boffo for Yahoo! shareholders, who traded the stock down 79 cents by midday to $16.83.

'More of a Stretch'

Though Yahoo! had said it was looking for a new CEO among media and technology companies, most people had assumed the choice would be someone not from the movie business, but from an ad-supported media industry such as television or radio. "His background doesn't seem to be a perfect fit," says Jonathan Bulkeley, a former AOL executive who's now chairman and CEO of online marketing company



. While migrating to an entertainment model similar to the one from which Semel arose might be an opportunity for Yahoo!, "it doesn't seem to be the first opportunity," says Bulkeley. "I think that's more of a stretch than figuring out how to make this medium more part of marketers' lives."

That said, Semel and his partner Robert Daly were "pillars of strength" in the movie business, says Bulkeley, and many good CEOs on the Internet have come with backgrounds that don't seem to be immediately relevant. For example, Bulkeley points out that



CEO Meg Whitman came to the company from


, where the toy industry executive oversaw Playskool and Mr. Potato Head.

Gordon Hodge, media analyst at

Thomas Weisel Partners

, calls the Semel surprise a good one. "I'm kicking myself for not having thought of it," he says. Calling Semel, whom he hasn't met, a "very creative thinker" and a "proven executive," Hodge says, "He ran a profitable business in what has tended to not be a profitable industry. It makes a lot of sense to me." At Warner Bros., Daly and Semel oversaw not only movie production, but added television, home video and music over time.

Filling It Out

The choice of Semel leaves a major problem unsolved for Yahoo!, says Hodge: the void in the company's ad sales business left by the departure of advertising sales chief Anil Singh. "My guess is that would be a high priority for Semel to fill that position," he says, adding that with Semel there, "they'd be able to attract a pretty high-profile sales executive." Hodge has a buy rating, his firm's second highest, on Yahoo!; Thomas Weisel Partners advised Yahoo! on its acquisition of



It will also be interesting, says Hodge, to see how Semel changes, or adjusts to, the compensation structure at Yahoo!. The firm has a reputation for thriftiness that's at odds with the freespending world of Hollywood, where Warner Bros., reports the

Los Angeles Times

, once surprised the cast of

Lethal Weapon 3

by handing out Range Rovers as if they were party favors. "Dealing with movie stars is a real art and probably requires extreme measures," Hodge says. "Well see what happens."

Scott Kurnit,



chief Internet officer, acknowledges that culture clash, but says, "On the whole, I think it's a good choice." Kurnit, who was a cable programming executive at

Warner Cable

for seven years when it and Warner Bros. were sister companies, calls Semel a "good, stable executive" who understands both the subscription media business and the advertising sales based media business, since Warner Bros. sells entertainment that's packaged for both outlets.

But, Kurnit says, Semel faces an occupational hazard unique to entertainment executives moving to the Internet. "There is a tradition among traditional media executives to want the Web to sing and dance prematurely," he says. "They run the risk of ruining the Web medium, which is function over form, vs. filmed entertainment, which is form over function."