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John Place may not Yahoo anymore, but he probably feels like yelling it a lot. Place, 46, retired March 2 as the ailing Internet portal’s first GC, and he cashed in big on the dot-com dream before it became a nightmare for so many others. At Place’s recommendation, Jonathan Sobel is the new general counsel of Yahoo Inc. Sobel was one of Yahoo’s six associate general counsel, managing the team handling complex technology deals and litigation. He was the company’s fourth in-house lawyer when he came from Chipson Technologies in 1998. Place’s timing — and his stock option cash-outs over the past three years — were, to say the least, prescient. On March 7, Yahoo chairman and CEO Tim Koogle announced he was stepping down in the face of downgraded first-quarter earnings estimates. In anticipation of the announcement — and because of fears it could rock the whole tech sector — Nasdaq stopped trading of the company’s already shaky stock for that day. It was a shocking development for a company that has minted numerous millionaires, developed one of the most recognized brand names in the world, and — unlike the vast majority of Internet companies — actually turned a profit. On March 7, Yahoo’s stock was already down about 80 percent from its all-time high of $250 a share, and on Koogle’s news it dropped another 20 percent, to around $14. Little noticed in the hubbub surrounding Koogle’s departure and the trading stoppage was the announced retirement five days earlier of general counsel, vice president and secretary Place. He was not one of Yahoo’s founders, but Place, who’d been senior corporate counsel at the San Jose, Calif.-based Adobe Systems Inc., became its first in-house lawyer when he joined the company in 1997, securing his chapter in Yahoo and Silicon Valley cultural lore. The legal department grew to 55 attorneys under Place, with Yahoo on the front lines of many Internet-related legal battles, from privacy to profitability to copyrights. Place became recognized internationally as a pioneer and authority in Internet law. He also became very rich. According to SEC filings, Place exercised Yahoo options or sold stock worth more than $30 million in the year 2000 alone — options he received at a fraction of the selling price. Did he know of Koogle’s plans? Place, through a Yahoo spokesperson, declined comment. Place’s departure was the first in a trifecta of high-profile March defections at Yahoo’s Santa Clara, Calif., headquarters. Koogle was next (although he’s staying on as chairman). Then, on March 14, Anil Singh, Yahoo’s chief sales and marketing officer and senior vice-president of business operations, announced his departure. The heads of Yahoo’s Canadian, European, and Asian operations also left the company for various reasons in February and March, leaving Yahoo in the same boat as a number of other big dot-coms looking for top executives. Place may have been the first major executive to jump ship, but analysts who follow Yahoo say his departure did not carry the weight it otherwise might have. “In the grand scheme of things, the general counsel’s leaving doesn’t rank as one of the biggest problems for the company,” says Derek Brown, an analyst with the investment bank W.R. Hambrecht + Co. in San Francisco. “In a normally operating world it may have been more significant, but in this world now it’s taken a back seat.” Yahoo is the world’s leading Internet portal, and its revenues last year came to $1.1 billion. But its advertising-driven business model has proven problematic as dot-com companies have crashed and Web advertising has diminished. Before Koogle announced his resignation, Yahoo had disclosed that revenue for the first quarter would be between $170 and $180 million, far below earlier estimates of $232 million and 2000 first-quarter earnings of $228 million. Yahoo’s stock opened in April 1996 at $3.50, peaked at $250.06 in January 2000, and at press time was trading at $15. Place had the ideal pedigree of local firm and high-tech in-house counsel experience for Yahoo. After graduating from Stanford Law School in 1985, he worked in the Palo Alto, Calif., office of San Francisco’s Brobeck, Phleger & Harrison, then went on to Adobe. Place is no spring chicken material by dot-com retiree standards, but he now has plenty of time and money to do whatever he’d like. And just what might that be? Place said that he plans to spend time with his family and do some traveling.

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