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In June 2000, as the tech bubble was deflating, Susan Decker left her job as one of the nation’s most successful Wall Street analysts to join Yahoo Inc. as its new CFO. Yahoo shares were in free fall and, rather suddenly, the effectiveness of online advertising was in doubt and entire business models lacked credibility.
Decker’s response was to publicly acknowledge those dim realities.
That sort of honesty in the face of adversity was refreshing at the time and helped to solidify Decker’s reputation as a straight shooter, observers say. Inside Yahoo, she was applying that candor with rigor, insisting that sales targets were set so realistically that even overperformance was avoided.
“If you were significantly over your targets, you were called in to explain yourself,” said one former Yahoo executive speaking on condition of anonymity. “After the bust, she knew that investors needed to have faith in the numbers and to know there was a predictable business model. She wanted predictability to show the maturing of the Internet as an industry.”
This month, seven years after joining the company, Decker, 44, was named president of Yahoo. Terry Semel, the former Warner Bros. co-chief who became Yahoo CEO a year after Decker joined the company, has resigned to focus on the role of nonexecutive chairman; co-founder Jerry Yang is the new CEO.
Many observers presume that Decker is on deck for Yahoo’s top spot after Yang, a 38-year-old self-made billionaire, steps aside.
While Yang has been a public face for Yahoo since its inception a dozen years ago, Decker, who declined to be interviewed for this story, is more mysterious for many.
However, various sources mentioned Decker’s assertiveness as a key attribute, with one industry observer saying he has heard her being referred to as the “alpha” in the new pairing at Yahoo’s top.
And with her Wall Street background, many believe she could mesh well with Yang, who has a more laid-back style and is a “legend” in Silicon Valley circles.
“She knows how Wall Street’s mentality works since she used to be an analyst herself,” said Hal Vogel, president of Vogel Capital Management and a longtime media and entertainment analyst. “That will help in her new leadership position.”
Current and former colleagues and industry sources also say the married mother of three and Harvard Business School graduate is smart and honest.
“It’s going to be a boring article because you won’t find anyone to say anything bad about her,” one former high-ranking Yahoo executive quipped.
That executive, who spoke on the condition of anonymity, said Decker was one of those rare CFOs who trusted executives enough not to nitpick their budgets.
The executive tells how, during a budget meeting with Decker, Yang, Semel, Yahoo co-founder David Filo and others about a new project he was working on, Decker pulled him aside. “She told me, ‘You just do the best job you can and don’t think about the P&L. When companies were creating computers, they didn’t know the exact business model, but they knew there was a market and they seized the opportunity.’ How many CFOs have that attitude? How rare is it that a CFO has that level of understanding and creativity?”
Decker was a 14-year veteran of Wall Street firm Donaldson, Lufkin & Jenrette. Institutional Investor magazine rated her a top analyst for 10 straight years. When Yahoo recruited her, she was global director of equity research at DLJ and before that was a research analyst covering 30 media, publishing and advertising stocks, including Yahoo.
Her disciplined financial approach has caught the eye of none other than Warren Buffett, and the world’s most famous investor this year named her to the board of directors of his Berkshire Hathaway.
Some pundits even speculate that Buffett, 76, could be sizing up Decker as his replacement. In his recent letter to shareholders, he wrote, “I intend to hire a younger man or woman with the potential to manage a very large portfolio who we hope will succeed me as Berkshire’s chief investment officer when the need for someone to do that arises.”
When he named Decker to the board, he said that she scored very high on his four criteria, which are “owner-oriented, business-savvy, interested and truly independent.”
Decker also is a director at Intel and Costco and was a Pixar board member until the Walt Disney Co. bought the animation studio.
Decker’s achievements at Yahoo include clearing the way for a $3 billion stock-repurchase plan, negotiating Yahoo’s big push into China by way of an equity stake in Alibaba.com and developing partnerships with eBay and 150 U.S. newspapers. And she has been well compensated for her efforts.
In 2005, Fortune magazine named her one the highest-paid female executives in corporate America, ahead of such CEOs as Patricia Russo of what was then Lucent Technologies (now Alcatel-Lucent), Meg Whitman of eBay and former Hewlett-Packard head Carly Fiorina.
Evidence of Decker’s ability to get along with others abounds. One former executive, who preferred his name not be used, said that “even during budget meetings, when people were fretting over this and that, she’d look at the big picture and say, ‘Wait, can’t we just move these numbers from here to there and it will mean the same thing?’ She was just so reasonable.”
Plus, she has a fun side, said Craig Forman, who was general manager of media and information at Yahoo and now is an executive with EarthLink.
During one meeting to acknowledge longtime employees, “there was a powerful, purple motorcycle involved,” Forman recalled.
“The bike was displayed in the headquarters building, and everyone was wondering who’d win the award,” he said. “To introduce the award, this person with a black leather jacket, helmet and dark glasses — looking a lot like Electra or some other action hero — drives onstage and gets off the bike, and it’s Sue. It was surprising, but she looked great.”
Decker, Forman said, “views her strong quality as judgment, and right behind that she most values credibility.”
Like everyone else interviewed, Forman is impressed with her brain power. “For people able to match wits with her, with an equal amount of energy, she’s a very good business partner. For people who can’t, it’s a struggle,” he said.
Yahoo shareholders are hopeful that Decker’s intelligence and impeccable reputation will help Yang turn Yahoo around. The company’s shares have been depressed for three years, and Google has overtaken it as the world’s most trusted, and profitable, search engine.
Some observers are skeptical, though, that the duo of Decker and Yang will bring much change to Yahoo, with many still looking for a new vision for the company.
One Wall Street source suggested that the team’s tenure might not be very different from Semel’s. The source noted that on the conference call after the management shake-up, the two used the terms “vision” and “energize,” but they did not say anything specific as to how they would change the culture at Yahoo.
“The question that will come up almost certainly is whether Yang has a vision,” that person said, “and whether he is willing or capable of putting his vision into her brain and not vice versa.”
The source added that “the Street’s not going to give either of them a long leash. One seriously should question if this change in leadership brings any new initiative.”
And, added one former colleague, “If there’s a downside to Sue, it’s her lack of operational experience.”
Kathy Sharpe, CEO of interactive marketing agency Sharpe Partners, also said Yahoo lacks a specific vision and that Decker and Yang need to decide whether their company is a search engine or a portal.
“It should be a portal,” she said. “Look at how AOL has regenerated itself. The consumer experience there is very high. But you can’t fight Google and serve up your own content as well.”
Sharpe said Yahoo’s home page runs behind MySpace in terms of unique audience of 18- to 30-year-olds. “That’s significant, because that’s the demo advertisers like,” she said. “The Yahoo brand just isn’t hip and cool anymore. Nobody brags about having a Yahoo page like they do with Facebook or MySpace. They missed that whole social networking thing, and they’ll have to rethink that.”
A Yahoo spokeswoman responded, though, that the company’s Flickr, del.icio.us, Yahoo Answers, Yahoo 360, Yahoo Video, MyBlogLog, Jumpcut and Bix products, with a combined 129 million users, makes Yahoo the biggest social network on the Internet.
Decker, Sharpe said, “is straightforward about Yahoo’s finances, and she’s never deviated from that, but she’s not as clear in explaining the direction Yahoo needs to go to right its ship. She’ll never be the Steve Jobs of Yahoo. That would be the antithesis of Sue. You won’t see her in a TV commercial.”
Alex Woodson in New York contributed to this report.
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