Yahoo co-founder Jerry Yang (picture right) announced that he will leave the position of Chief Executive Officer as soon as a replacement is found. Only CEO for 18 months, Yang has been subject to intense shareholder pressure and criticism. While his heaviest load of criticism was received after turning down Microsoft's unsolicited buy offer at $33 per share, he again frustrated investors when a potential ad partnership with Google failed. Yang's efforts to boost Yahoo's performance were only made more difficult by the recent economic climate. Yahoo's stock rose $1.17 at news of the change, reflecting the sentiment many share that the Microsoft merger may be back in play. Steven Ballmer was quoted in Forbes that this statement reflects the frustration of Yahoo board members, and Microsoft still does not wish to buy Yahoo. Goldman Sachs investor James Mitchell wrote in a note to investors that while Microsoft may favor search partnership, he believes that full acquisition "could be more appealing for both parties."
UBS analyst Ben Schachter is another financial professional that believes that Microsoft will eventually own Yahoo, especially in light of Yang's eventual role change. While many other experts would disagree, the decision seems to be a benefit to both, if Microsoft intends to compete with Google in the Web Search arena. Yahoo and Microsoft trail Google by a wide stretch, and the merger could improve their longevity in the field.
Potential replacements include current Yahoo President Susan Decker, and former Yahoo chief operating officer Dan Rosenweig. According to the Associated Press, the board could possibly accept one if its own directors, such as former Viacom Inc. CEO Frank Biondi or former Nextel CEO John Chapple. However, Schachter expects Yahoo's board to prefer an external candidate.
Yang will continue to act within the company as "Chief Yahoo," a titular role he filled before becoming CEO. In a memo to employees, Yang wrote, he has "always, and will always bleed purple."