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Yahoo's Yang to step down as CEO

Co-founder giving up top spot following failed talks with Microsoft, collapse of Google deal

By Martyn Williams, Nancy Gohring and James Niccolai
November 17, 2008 12:00 PM ET

IDG News Service - After failed buyout talks with Microsoft Corp., an online advertising deal with Google Inc. that fell apart and two rounds of layoffs, Jerry Yang is stepping down as CEO of Yahoo Inc., the company said late Monday.

Yahoo announced that it has begun searching for a new leader. Yang, a Yahoo co-founder who became CEO in June 2007, will reassume his former title of "Chief Yahoo" once a successor is found and will also remain on the company's board.

The 40-year-old Yang has been under intense pressure from shareholders in recent weeks for a string of perceived missteps that began in February with Microsoft's $45 billion offer to buy Yahoo. Microsoft was offering $33 per share for the Internet company, but Yang rejected that price as too low.

Jerry Yang steps down as CEO of Yahoo
Yahoo co-founder Jerry Yang will step down as CEO and return to his "Chief Yahoo" role.

Eventually, Microsoft withdrew its offer. Yang went on to hold talks with News Corp. about a venture with that company's MySpace unit and with Time Warner Inc. about a merger with its AOL subsidiary, but those discussions also came to nothing. In June, he struck the ad deal with Google, but that fell apart in the face of opposition from the U.S. Department of Justice.

With Yahoo shares currently trading at less than $11 per share, the Microsoft offer looks like a very attractive one with the benefit of hindsight — thus the discontent from some shareholders.

Yang appeared to recognize this: During a keynote session at the Web 2.0 Summit in San Francisco two weeks ago, he made a thinly veiled invitation to Microsoft to come back to the negotiating table.

"To this day, I would say that the best thing for Microsoft to do is to buy Yahoo," Yang said. And when quizzed on whether he would stick to the higher price that he demanded back in May, he added, "Oh no. At the right price, whatever the price is."

But Microsoft CEO Steve Ballmer didn't bite. "We are not interested in going back and re-looking at an acquisition," Ballmer said a couple of days later. "I don't know why they would be either, frankly. They turned us down at $33 a share."

The move to appoint a new CEO isn't surprising, said Greg Sterling, an analyst at Sterling Market Intelligence. "There had been public speculation about this for several months, and as they went through several quarterly earnings calls and the condition of the company wasn't improving, I think there was some sense that you needed new leadership," he said.

Sterling credits Yang with some good ideas for turning around Yahoo, such as the company's Open Strategy plan to open up its Web sites and online services to outside developers. But, Sterling said, "there's a way in which maybe his personality isn't well suited for what the company needs, which is maybe a more forceful leader who can restore confidence."

Reprinted with permission from IDG.net. Story copyright 2014 International Data Group. All rights reserved.
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