Bowing to Wall Street pressure, Yahoo CEO Jerry Yang has agreed to relinquish the Netco’s top exec post as soon as the company finds a replacement.
Yang, who took over the top exec post when Terry Semel ankled in June 2007, will revert to “chief Yahoo” once the new CEO has been tapped. The exec, who co-founded Yahoo with David Filo in 1994, has been under fire for months due to Microsoft’s withdrawn takeover bid and the descent of the company’s stock price.
Netco cast the decision as a mutual one.
“Jerry and the board have had an ongoing dialogue about succession timing, and we all agree that now is the right time to make the transition to a new CEO who can take the company to the next level,” said chair Roy Bostock, who is heading the search.
He described the board as “deeply grateful” to Yang “for his many contributions” as CEO.
On Monday, Yahoo shares hit $10.63, a fraction of the amount Microsoft topper Steve Ballmer offered to acquire the company earlier this year. The tech giant had been willing to pay $33 per share in a bid valued at $47.5 billion, but Yahoo wanted $37 per share.
Yahoo’s failed negotiations drew criticism on Wall Street and gave Carl Icahn an opening for a proxy fight, which he later dropped. He lobbied hard for Yang’s ouster under the belief that would facilitate a Microsoft deal.
Microsoft subsequently tried to acquire Yahoo’s search biz, but the Netco effectively killed those negotiations when it entered an outsourcing deal with rival Google, which dropped that deal earlier this month when the Justice Dept. indicated it would pursue antitrust litigation to block it.
Institutional investors have been lobbying for Yang’s ouster, as the Netco’s stock price dropped even before the broader market took a dive. At market close on Monday, Yahoo stock was down 65% from its 52-week high.
Yang, who will remain on the company’s board, fell on his sword by saying he has “always sought to do what is best for our franchise.” He added that he would continue to focus on global strategy and do everything in his power to help Yahoo realize its full potential.
When Yang took the top spot from Semel more than a year ago, he was expected to return the Netco to its Silicon Valley roots. Under Semel’s watch the Netco had tried to go Hollywood, opening a media division in Santa Monica headed by former ABC Entertainment chair Lloyd Braun, who has since ankled along with many of Semel’s senior hires. Many critics argued, however, that Yang, who has never been a senior executive at another company, didn’t have the requisite corporate savvy to lead Yahoo through tough times.
No likely candidates were immediately named as potential replacements for Yang. Whoever ultimately takes the job will likely be strongly pressured to pursue some kind of deal with Microsoft or possibly Time Warner’s AOL.
(Ben Fritz contributed to this report.)