Semel, Terry

UXL Newsmakers, (2006)

Semel, Terry

February 24, 1943 • Brooklyn, New York

CEO, Yahoo! Inc.

Semel, Terry. Arun Nevader/WireImage.com.

Do you Yahoo? Millions of computer users Yahoo every single day, but when Terry Semel took over as chief executive officer (CEO) of Yahoo! Inc. in 2001, he was not one of them. In fact, Semel knew very little about computers. When he received an e-mail, one of his assistants would print it out and Semel would scrawl out a written reply. Nevertheless, when Yahoo, one of the biggest Internet service providers, was struggling to survive in the cutthroat on-line industry, it turned to Semel. His more than thirty-year track record as an entertainment executive was unparalleled. By 2004, after a string of shrewd mergers and a creative organization redesign spearheaded by Semel, Yahoo was back in the game. Its stock prices were on the rise and analysts predicted a healthy future. Semel, the man who had barely ever surfed the Net, was given all the credit.

A bored accountant goes Hollywood

The man who resurrected Yahoo was born on February 24, 1943, in Brooklyn, New York. His father, Benjamin Semel, was a women's coat designer; his mother, Mildred, was an executive at a bus company. In 1964 Semel earned a degree in accounting from Long Island University in Brooklyn, New York. He briefly worked as an accountant, but soon became bored. When a friend told him about a sales training program offered by Warner Brothers, one of the top movie studios in the United States, Semel did not hesitate to change careers. As he explained to Fred Vogelstein of Fortune magazine, the Warner program offered him a "chance to learn about marketing and sales, which I was interested in." Semel simultaneously attended City College of New York in New York City, where he earned a master's degree in business administration (MBA) in 1967.

Semel's early days at Warner were spent on the road as a movie salesman. He traveled across the country with a list of upcoming Warner features, and talked theater owners into buying what hopefully would be the next box-office hit. Semel was such a whiz at sales that he caught the attention of other entertainment companies. In 1971 he became domestic sales manager at CBS-Cinema Center Films. Two years later he was named vice president and general sales manager of Buena Vista, a division of Walt Disney. In 1975 Semel was lured back to where he had begun: Warner Brothers. That same year he met Robert Daly, the man who would become his future business partner.

The dynamic duo

In the 1970s, before Semel and Daly took the helm, Warner Brothers was bringing in about $1 billion a year, with most of the studio's revenue coming from its films and its record label, Warner Brothers Music. Semel and Daly changed all that, effectively transforming the way movies were made and marketed, and how studios functioned. The duo expanded Warner Brothers into international markets, extended the music division to include hit record labels such as Elektra and Maverick, and broadened the company's entertainment arm to embrace television. Warner Brothers Television was responsible for producing many popular network TV series, including China Beach, E.R., and Friends. In 1995 Semel and Daly went one step beyond and launched the Warner Brothers (WB) Network, which created original series aimed at a younger audience.

Perhaps the most revolutionary thing that Semel and Daly accomplished was to turn Warner Brothers into a brand name. Warner Brothers Studio Stores popped up across the United States and carried all kinds of merchandise, from shirts to hats to neckties featuring well-known Warner Brothers animated characters such as Bugs Bunny, Daffy Duck, and Scooby-Doo. Semel and Daly also saw the potential in movies as merchandise, and began selling various products related to the movies they made. In 1989 they took a chance on an unknown director named Tim Burton (1958–), and brought Batman to the big screen. The film was incredibly expensive to make, but it became one of the most successful movies of all time. It was also a merchandising gold mine, setting the standard for the way filmmakers of the future would finance and market their movies.

By the late 1990s, under Semel and Daly's guidance, Warner's annual revenues had grown from $1 billion to approximately $11 billion. The company had expanded as never before, and its film division was in peak form. In addition to Batman, Semel and Daly had green-lighted some four hundred films. Some were blockbusters like the scifi thriller The Matrix (1999); at least thirteen were nominated for a Best Picture Academy Award; and three actually took home the top honor. Semel and Daly were the toast of Hollywood, and were consistently named to the power lists of the entertainment business.

An unlikely combination

After he left Warner, almost every major studio set its sights on Semel, who was known in the business as a master negotiator. Semel, however, was embracing his newfound freedom. As he told John Greenwald of Time, "For the first time in my life I will not have a contract, a road map to follow. This could be the first time I can choose what direction I'm going in." The direction he chose was the Internet, a new medium with untapped potential. Semel launched his own technology investment company called Windsor Media and immersed himself in his newfound field.