Yahoo co-founder Jerry Yang, who earned the ire of many shareholders for rejecting a US$47billion (Dh172bn) takeover offer from Microsoft, is stepping down as chief executive of the internet company. The Sunnyvale, California firm announced yesterday that Mr Yang, 40, who took over as chief executive just over a year ago, would remain in the post until a replacement could be found by the board of directors.
"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 Yahoo chairman Roy Bostock. "We are deeply grateful to Jerry for his many contributions as CEO over the past 18 months, and we are pleased that he plans to stay actively involved at Yahoo as a key executive and member of the board," he added in a statement.
Yahoo said Mr Yang, who founded the popular web portal in 1995 at the age of 26 with Stanford University classmate David Filo and became a billionaire when it went public the next year, would remain in a strategic role at the company. Mr Yang said it was time to turn Yahoo, whose share price has plunged during the past year, over to a new leader. "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 saidt.
"When the board asked me to become CEO and lead the transformation of the company, I did so because it was important to re-envision the business for a different era to drive more effective growth," he said. "Having set Yahoo on a new, more open path, the time is right for me to transition the CEO role and our global talent to a new leader," he said. "I will continue to focus on global strategy and to do everything I can to help Yahoo realise its full potential and enhance its leading culture of technology and product excellence and innovation," Mr Yang added.
Since taking over as chief executive in June 2007, Mr Yang's stewardship of the company has come in for heavy criticism and his departure could possibly open the way for renewed talks with Microsoft. Mr Yang's rejection of Microsoft's $33-a-share takeover bid was met with disapproval by many shareholders including billionaire investor Carl Icahn, who led a revolt against Mr Yang and was eventually named to Yahoo's board.
A proposed advertising partnership with internet search king Google fell through this month amid opposition from US Justice Department antitrust regulators. The deal had been expected to earn Yahoo hundreds of millions of dollars in the first year alone. Yahoo has been trading at around $10 to $12 a share recently. Yahoo closed at $10.63 on the Nasdaq in New York yesterday, a loss of 1.76 per cent on the day. In after-hours trading following the announcement Yang was stepping down Yahoo gained 4.42 per cent to $11.10.
Michael McGuire, a Gartner Research analyst, said Mr Yang's departure after a year of turmoil was not unexpected. "I don't know how surprised anyone would be," he said. "It seemed clear something needs to happen. The surprise is they made the announcement without Yang's successor in hand." Yahoo said the company was looking at both internal and external candidates to replace Mr Yang and had retained Heidrick Struggles, a leading international executive search firm, to assist in the process.
The news of Mr Yang's departure comes less than a month after the company announced plans to lay off at least 10 per cent of its workforce, some 1,400 employees, because of the weak economy. Yahoo's net profit for the third quarter of the year was $54million, or four cents per share, down from $151million and 11 cents per share during the same period of 2007. Revenue was S1.78bn in the third quarter, an increase of only one per cent over the 1.76 billion dollars in the same period last year.
Yahoo has been losing ground on the internet to companies such as Google, MySpace and Facebook and the economic slowdown has hurt the firm particularly hard as advertisers cut back on spending. *AFP