Decker praised, but some ask if she can save Yahoo

SAN JOSE, Calif. -- A few years ago, a Wall Street analyst challenged Yahoo chief financial officer Susan Decker's forecast about the Internet giant's revenues.

If Yahoo made its number, it would snow at Yahoo's headquarters in Sunnyvale, Lanny Baker of Salomon Smith Barney mocked.

The next quarter Baker showed up at an all-hands meeting carrying cold, white stuff from Tahoe.

"People trust her," said Lisa Nash, a former Yahoo marketing executive. "They trust her when times are good, and they trust her when times are bad."

In early December, Yahoo announced a major reorganization that expanded Decker's responsibility and appeared to put the 44-year-old executive in line to be the company's next chief as Yahoo struggles to compete with Google's advertising juggernaut.

In a blog posting the evening of the announcement, chief executive Terry Semel, 63, said Decker would head a new unit that would focus on creating more value for advertisers .

The departures of Dan Rosensweig, the chief operating officer, and Lloyd Braun, the head of the media group, were also part of the shakeup.

"An expert on far more than financials, Sue has been a terrific contributor to our business strategy," Semel wrote. "She's one of the best executives around and the ideal person to fill this critical new role."

Semel is not expected to leave soon, but some investors immediately second-guessed Decker's appointment and her possible role as heir-apparent, pointing to her lack of experience running a business and her background as a financial analyst.

Analysts sent out research notes warning of the risks Yahoo faces in executing this new strategy. In the past year Yahoo's stock has fallen more than 35 percent.

"I'm sure Sue Decker has been solid with the numbers, but where's the marketing passion?" one investor wrote in a response to Semel's posting. "Is Yahoo really going to dig itself out of the hole with a bean-counter at the helm?"

Still, executives who worked with Decker during Yahoo's first turnaround when Semel arrived said they think she has the skills Yahoo needs now.

"Sue Decker is absolutely brilliant," said Rob Solomon, a former senior vice president at Yahoo who is now chief executive of SideStep, a travel search engine. "I think it's wonderful to have her brain power thinking about more than finances."

There's no shortage of challenges facing her. Yahoo's advertising business is much less lucrative than Google's thanks to a technological gap that Yahoo is hoping to close with the release of long-delayed advertising software, code-named Panama.

Meanwhile, Google continues to move aggressively into video and graphical advertising -- areas where Yahoo has been strong. Shortly after the Yahoo reorganization announcement, Google began to test Google Audio Ads, which lets advertisers create radio campaigns using an online system that can target listeners by location, station type, day of the week, and time of day.

Decker majored in computer science and economics at Tufts University and then got her MBA at Harvard. She joined Yahoo in April 2000 after 14 years at Donaldson, Lufkin & Jenrette, where she rose from media analyst to global director of equity research.

Earlier this year, she put together a partnership between Yahoo and eBay that gave Yahoo rights to sell advertising on eBay's US marketplace. In November, Decker was involved in a landmark deal to provide advertising and other services to about 200 US newspapers.