Yang To Step Down as Yahoo CEO
Jerry Yang is transitioning out as Yahoo's CEO, but he will continue on as a member of the board, according to an announcement issued late on Monday by the online search and advertising company. The announcement came as Yahoo's stock continued to slide, closing on Monday at $10.63 per share.
Microsoft, which initiated a hostile takeover of Yahoo in late January, had once offered to pay cash plus $33 per share for Yahoo stock. However, that deal to buy all of Yahoo fell through and was called off by Microsoft in May.
Yang was blamed by Microsoft's CEO Steve Ballmer for the failed deal, and the press generally echoed that conclusion, although Yang had said Microsoft was the one to back out.
Microsoft's post-hostile takeover position has been that it would consider a deal to acquire just the search part of Yahoo's business. However, Yahoo has been cool to that idea.
A cash-strapped Yahoo had been seeking an alternative deal -- a partnership with No. 1 search ad giant Google. That plan, in which Yahoo would host Google search ads, was vehemently opposed by Microsoft. Advertisers also complained and Washington, D.C. legal observers were critical. In response, Google officials called off the proposed ad hosting deal with Yahoo earlier this month.
Yahoo's deal-making has come with a cost. The company paid $37 million for advisor fees just to deal with Microsoft's offers this year and the failed Google deal.
Yang has been the favorite whipping boy of corporate raiders and stock speculators. He faced the ire of shareholder Carl Icahn, who received three positions on Yahoo's board after pressuring Yahoo's management to renew a deal with Microsoft.
Yahoo had additional shareholder ire to deal with on top of Icahn's criticisms. The company had flat financial results in its third fiscal quarter. In response, Yahoo announced that it plans to cut 1,500 employees.
The search for Yang's replacement now begins. Chairman Roy Bostock is currently looking both internally and externally for a new prospect. Yang, who had been appointed to the CEO position by Yahoo's board in June of 2007, will stay on as CEO until his replacement is found.
Yang was the original cofounder of Yahoo with David Filo in April of 1995. The two came up with the idea for the company as Stanford University graduate students working on an Internet directory page.
Kurt Mackie is senior news producer for 1105 Media's Converge360 group.