Yahoo! loses! CEO!, Blockbuster <3 Blu-Ray (and C5jet)

A double-strength IT Blogwatch for Tuesday: in which Yahoo! gets a "new" CEO and Blockbuster throws its weight behind Blu-Ray. Not to mention a tiny tricycle powered by a turbojet...

Jerry Yang breaks the news on his weblog:

The title of Chief Yahoo takes on new meaning today. I have the great honor of stepping into the role of Yahoo!’s Chief Executive Officer. Yahoo! has an incredibly bright future and I make this move with deep conviction and enthusiasm. I’ve partnered closely with our executive teams for 12 years to steer our strategy and direction and today I’m ready for this challenge.

Today also marks the close of a great chapter in my life with Terry Semel as my partner. Since coming on board in 2001, Terry has given Yahoo! six of its best years. He delivered great value to our users, advertisers and shareholders ... I will always be grateful for the incredible achievements under his leadership — and for his mentorship and friendship. We’ll continue to benefit from his support and guidance as he transitions to his role as our Chairman.

I also couldn’t ask for a better partner in Sue Decker as our new president. In addition to knowing this company inside and out, Sue has incredible talents, leadership abilities, a fierce focus on winning, and intense dedication to this company and its people. I look forward to teaming more closely with her as we pursue our joint vision. What is that vision? A Yahoo! that executes with speed, clarity and discipline. A Yahoo! that increases its focus on differentiating its products and investing in creativity and innovation. A Yahoo! that better monetizes its audience. A Yahoo! whose great talent is galvanized to address its challenges. And a Yahoo! that is better focused on what’s important to its users, customers, and employees.

Om Malik decodes Yang's post:

Is that a tactical admission that defeatist attitude had taken over the company, which has become the farm system for rest of the Valley. Is this big shake up enough to save Yahoo, which has seen some of its best talent leave the company to try their luck at some other start-ups.

...

It finally happened: angry shareholders seem to have got their way.

Erick Schonfeld muses on the other promotion of the day:

Susan Decker ... Yahoo's former CFO who was put in charge of the new advertiser and publisher group just last December, is widely seen as the favorite for the top spot—if she can prove her chops in an operating role.  As head of the advertiser group, she was in charge of Yahoo's new Panama advertising system, which is supposed to help it compete more effectively against Google.  Now, she will be responsible for all of Yahoo's operations.  If she can reignite growth, and the stock, that CEO title could become hers as well.

Rob Hof is surprised at his own surprise:

Despite all the talk about when Semel would leave, as Yahoo struggles to catch up with Google, I'm still surprised he's leaving at this point. For all of Yahoo's troubles, it's hardly going down for the count just yet, so I would have thought Semel might be able to stick around as the new search ad system Panama starts to kick in and potentially close a bit of the gap with Google.

While Semel will remain a non-executive chairman, clearly the board must have lost patience with the slow progress. I sense that Yang has huge respect among the troops, and while he's unproven as a manager of such a large company, Decker's appointment as president signals that she will be picking up day-to-day executive duties.

Paul Kedrosky basks in his own cleverness:

Whoa, good call by me over and over (and over) on CNBC about Terry Semel's tenure at Yahoo ... Mind you, Semel is apparently staying on as "non-executive chairman" and as an "important resource" at Yahoo, a euphemism which put me in mind of some combination of Sunnyvale taxi driver and Sparkletts delivery guy. The stock is up on the news, which will irritate my friend Herb to no end, but makes me right in what I've been saying on CNBC for some time.

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Semel is saying "he's long been talking about a smooth transition" in the company's senior leadership. Claims he wanted to leave sooner rather than later. Riiiight. ... Still not clear to me what's going to be different. Better execution? What about dumping some assets? Execution, winning, and speed are nice, but specifics would be helpful.

...

The letters to/from Semel and the board in some new SEC filings are such happy talk. Makes me think Semel is getting a gold watch after thirty years of service, not leaving under loud complaints.

Ashkan Karbasfrooshan owns stock in Yahoo!:

Don’t forget Semel owns a boatload of shares and is laughing all the way to the bank while the denigrators dance on his tomb today, so to speak ... Jim Cramer said the stock would go up $3-4 when that happened, right now it’s up $1.60 (or 5.75%). This one will probably close above $30 on a combination of relief, euphoria and institutional money flowing back in.

This might be the best thing to happen to YHOO, since, well Semel came on board after the nuclear winter of 2001-03.  The company could not make Wall Street happy, Semel will be the fall guy ... Let me be very clear about one thing: Semel got wayy to much credit for the firm’s turnaround and will get way too much slack for its fall from the top. Semel did wonders by reducing the number of units Yahoo! had, and he did better than 99% of the people that Yahoo! could have recruited to fix things… but he also was unfairly blasted for things that Yahoo! should not have been blamed for (not buying Google, being one of them, for until the IPO no one knew Google would be worth 2-3 times Yahoo! within 2-3 years of the IPO!)

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The fact that Yang is back in - and not Sue Decker or someone else - shows that this was not planned.  After all, unless it was Yang’s plan to quit and one day return to run Yahoo!, this shows that the Board and Semel finally said “enough is enough.”

Allen Stern muses:

This is obviously big news for a company whose employee morale has been pegged at an all-time low.

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I have said over and over that Yahoo is in a perfect place and time to start kicking the Google butt. It's time, it's time, it's Yahoo's time! Or is it too late with all of the talent that has left over the past months?

Meanwhile, Blockbuster is busting up the HD-DVD vs. Blu-Ray battle...

Herr Paul Julius Reuter reports:

Blockbuster Inc. today put its weight behind Sony Corp.'s Blu-ray DVD format, as the No. 1 video rental chain said it would boost the number of stores carrying the high-definition discs to 1,700 by mid-July. Blockbuster said Blu-ray has proven to be more popular among its customers than HD DVD, the competing high-definition format. The company has carried both Blu-ray and HD DVD products in 250 of its 8,000 stores since November 2006, and Blu-ray rentals have "significantly [outpaced] HD DVD rentals" in those stores, according to a company statement. Blockbuster will continue to offer both Blu-ray and HD-DVD titles in those 250 stores and through its online rental service.

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The format competes with HD-DVD, which is backed by Toshiba Corp. HD-DVD offers somewhat less storage capacity than Blu-ray, but HD-DVD players, burners and discs are cheaper to produce than their Blu-ray counterparts ... But the war between HD DVD and Blu-ray -- which is also supported by companies such as Samsung Electronics, Philips Electronics NV, Matsushita, Apple Inc. and Dell Inc. -- has curbed adoption of the new formats, since some consumers are concerned that they will end up with obsolete players.

Eric Bangeman adds:

Blockbuster's decision is not a indication of the imminent demise of HD DVD, but it doesn't do the format any favors either ... Consumers considering plunking down some dough for an HD player will be hearing the message that if they want to be able to rent HD movies, Blu-ray is the only option. If that message takes hold, HD DVD price cuts and rebates may not be enough to convince consumers otherwise.

Meghann Marco mumbles, "Meh":

Is this the final blow for HD DVD? Wait, does anyone still rent at Blockbuster?

Alexander Sliwinski, too:

We haven't really seen the inside of a Blockbuster store since 2002 (due to Netflix and GameFly) and it would be interesting to know if the online rental numbers (which would probably be more tech-forward renters) are the same as the stores. Once the online versions of Blockbuster and Netflix choose a side, then we'll have our answer to who's going to win this ridiculous format war.

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It should also be noted that the Blu-ray player coming standard with the PS3 has helped move movies. Although the PS3 isn't selling fantastically, it does create a solid install base for the Blu-ray format compared to HD DVD players, which have to be purchased separately in the form of the Xbox 360 add-on or a dedicated player.

Show Kevin Shult the money:

... a crushing blow to its technological rival, the HD DVD format ... the battle to buy Blu-Ray or HD DVD disks has baffled Americans for the past year.

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All major studios except Universal Studios, which is owned by General Electric Co (NYSE:GE), release films in Blu-Ray. That means no Miami Vice, Evan Almighty, Knocked Up or The Bourne Supremacy for Blu-Ray. Boo-hoo. But don't worry, The Walt Disney Co (NYSE: DIS) will release its films exclusively in Blu-Ray. Warner Brothers, a unit of Time Warner Inc (NYSE: TWX) and Paramount Pictures, owned by Viacom Inc (NYSE: VIA) will make films in both formats.

John Paczkowski quips:

Looks like Sony may not have to add a new Blu-ray wing to its Museum of Failed Formats after all ... the HD DVD standard ... until this morning, seemed to have the upper hand in the next-generation DVD format war. A few months back, HD DVD players were outselling their Blu-ray counterparts by a large margin, accounting for 60% of all high-definition set-top players sold. But recently the limited catalog of Blu-ray titles seems to be giving consumers pause.

But Michael Gartenberg still thinks we're asking the wrong question:

This battle is far from over. Blockbuster is important but they're not the kingmaker here. There are still a lot of factors that can tip the scales and if they occur, Blockbuster and others will follow suit ... I've talked in the past how neither format may emerge victorious here and that's still looking to be a reasonable scenario going forward.

And neonman is incandescent:

The unfortunate thing about Blu-Ray is its BD+ DRM feature, which has not yet been turned on. While Blu-Ray and HD-DVD both use AACS, Blu-Ray's BD+ is an additional layer of DRM which has not yet been broken ... All it will take is for Blu-Ray Disc publishers to start using BD+ on their titles (which we can expect to see in a few months) and at that point our hopes of ever seeing free HD disc player software will be dashed once again. For now, as a user who wants to play HD content with free software, I'm going to advocate the use of HD-DVD and not Blu-Ray.

Colin Smith is sanguine:

"How to close the door after the horse has bolted." By the BlockBuster management. The future ain't DVD, of any format. The future be network distributed content, no matter what the US film industry wants you to think.

LightPhoenix7 agrees:

The major indicator of trends - the porn industry - hasn't chosen a format yet. In fact, they're pretty much eschewing physical media for the internet. So, were I to be a betting man, I'd say that an online format is going to be the next big thing.

As does twistedsymphony:

I see the HD-DVD vs BRD debate along the same lines as the DVD-Audio vs SACD debate... which format one that war? NEITHER the equipment was over priced, crippled by DRM and only a fraction of the market owned the supporting equipment to fully utilize it nevermind become actually interested in it.... who won that war? technically it still rages on but the real victor was the MP3 and other digitally distributed forms of music... far and wide technically inferior to the DVD-A and SACDs but it's pretty apparent that consumers go for convenience over quality... at least in terms of their media.

DrXym looks at the fundamentals:

It's not a question of if HD DVD will fail but when. Now perhaps some cheap HD DVD players will charge over the hill and save the day, but I think it may be too late for that.

That doesn't mean Blu Ray has set the world alight - it's still transitioning from early adopter to mainstream. But it looks inevitable that in a few years the only things selling in your local store will be DVDs and BDs.

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