Mr Jerry Yang (pictured), the chief executive of Yahoo, will step down from his role as soon as the board finds a replacement for the Internet company, Yahoo said on Monday.-- PHOTO: ASSOCIATED PRESS
SAN FRANCISCO - YAHOO said Jerry Yang will step down as chief executive as soon as the board finds a replacement, sending shares up 4 per cent on hopes the departure would clear the way for a deal with Microsoft.
Commentary:
'Clearly there's been a shift in the power structure and most likely the board is asserting power over management. Probably what it's indicating is that Yahoo's performance is continuing to deteriorate, the board is becoming frustrated and wants to look into more options. It makes it more likely now that there will be a deal with Microsoft.' Douglas Christopher, Analyst, Crowell Weedon
'If Microsoft hasn't asked for discussions then probably the board wants to have discussions with Microsoft and Jerry wouldn't be the ideal person to have in that process. Either the deal is provoked or they want to make a deal with Microsoft'. Jeff Embersits, CIO, Shareholder Value Management
SAN FRANCISCO - YAHOO co-founder Jerry Yang, who is stepping down after a rocky tenure as chief executive of the Internet company, is one of the original Silicon Valley dot-com billionaires.
Born in Taiwan on November 6, 1968, Yang moved to the United States with his family when he was around 10 years old and was raised in San Jose, California.
Mr Yang - who will return to his former role as Chief Yahoo, focusing on strategy and technology - tried to carve an independent strategy for Yahoo and was blamed when Microsoft walked away from an offer to buy Yahoo earlier this year.
Rival Google abandoned a search advertising partnership amid regulatory concerns, and Mr Yang faced a growing chorus of criticism from investors and analysts as Yahoo's shares nosedived.
Yahoo's months-long discussions with Time Warner about combining with its AOL unit - as yet another way to boost Yahoo's earnings - have also failed to produce a deal.
'The company is in desperate need of change and this is clearly one way to do it', said Mr Ross Sandler, an analyst at RBC Capital Markets, adding that Microsoft could enter the picture again. 'Jerry was the roadblock for the last deal getting done', he said.
Microsoft declined to comment.
Yahoo shares rose to US$11.10 (S$16.94) in after-hours trading from their Nasdaq close of US$10.63.
The shares are down nearly 65 per cent from their 52-week high of US$30.25, reached in February, two weeks after Microsoft made its US$31-a-share offer public.
Microsoft withdrew its US$47.5 billion buyout offer in May after Yahoo rejected the sweetened bid.
Mr Yang, a co-founder of Yahoo, took on the CEO role in June 2007, hoping to strengthen its position as an online consumer brand.
'From founding this company to guiding its growth into a trusted global brand that is indispensable to millions of people, I have always sought to do what is best for our franchise', Mr Yang said in a statement.
In an e-mail sent to employees, a copy of which was obtained by Reuters, Mr Yang said his decision to step down was taken jointly with Yahoo's board.
Mr Yang has been talking with the board, which includes activist investor Carl Icahn, about stepping down since before Google pulled out of the search deal in early November, said a person familiar with the talks.
Chief Yahoo again Yahoo Chairman Roy Bostock is leading the effort to find a replacement, said Mr Yang, who will continue to serve as a director.
'Jerry was miscast in this CEO role as far as running Yahoo at this point', said Mr Martin Pyykkonen, an analyst at Global Crown Capital. 'He's much better off running strategy or technology behind the scenes'.
Mr Pyykkonen said it was a step in the right direction for Yahoo, but warned that a lot depends on the board's choice to replace Mr Yang.
'Because he's stepping down doesn't mean the company is going to magically be wonderful again', he said.
Yahoo has hired the executive search firm of Heidrick & Struggles to look for both internal and external candidates.
The process could take anywhere between four weeks and 12 weeks, the source said.
Analysts listed several executives as potential candidates for the job, including former AOL chief Jon Miller, News Corp President and Chief Operating Officer Peter Chernin, former eBay Inc Chief Executive Meg Whitman, Yahoo COO Dan Rosensweig and Yahoo President Sue Decker.
The source familiar with Yang's talks with the board said Ms Decker, No. 2 at Yahoo, was among the candidates being considered. -- THOMSON REUTERS
