Yahoo's Yang no longer the right CEO

11-19-2008 | AP

The field is now clear for Microsoft to make a new bid for the company

Panama Star SAN FRANCISCO. Yahoo Inc. founder Jerry Yang has never concealed how much he cares about his Internet company.

His emotional attachment is one of the reasons he balked at a $47.5 billion takeover offer from Microsoft Corp. six months ago. The same devotion finally led Yang to conclude he should step aside as chief executive, as the company seeks to bolster its depressed stock price and sagging earnings.

Yang's surrendering of the CEO reins, announced Monday, won't occur until Yahoo finds a suitable replacement. The Sunnyvale-based company said it is interviewing candidates inside and outside Yahoo in a search led by its chairman, Roy Bostock, and the executive recruitment firm Heidrick & Struggles.

It didn't take long for analysts to conclude Yang's departure will clear the way for a major overhaul that could culminate in Yahoo's sale to Microsoft — which Yang refused to do in May, to the great irritation of shareholders.

"We still believe Microsoft will eventually own Yahoo," UBS analyst Benjamin Schachter wrote in a research note late Monday.

"Jerry moving out of the CEO role may accelerate this."