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Jerry Yang throws in the towel as CEO

by on18 November 2008

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Will retain seat on Board and cry all the way to the bank


Yahoo! Inc. has finally announced that Jerry Yang, will step down from his post as CEO as soon as the Board of Directors names a replacement.  Shortly after the announcement Yahoo’s shares rose nearly four percent.

Analysts had claimed that Yang was the veritable fly in the ointment that kept Yahoo from making a deal with Microsoft for the sale of the company. Yang has also been saddled with the blame for the collapse of the Google Inc. deal with Yahoo, where Google was planning to sell some of its advertising through Yahoo just before the stock market took its big dive in October.

Carl Icahn, a vocal minority shareholder of Yahoo, fought his way onto the Yahoo Board after threatening to oust the entire Board and Yang and replace them with his own hand-picked slate.  Icahn’s extreme pressure tactics and high visibility antics earned Icahn a seat on the Board of Directors. Icahn has to be pleased with the resignation of Yang, although with Yang out of the bull’s eye one does have to wonder who will be next in the hot seat at Yahoo.  Perhaps it will be Roy Bostock, Icahn’s other arch nemesis.

Yahoo’s shares had reached a trading high of $30.25 in February 2008 after Microsoft made an offer of $47.5 billion to purchase Yahoo’s shares. The Board and other investors held out, and since then Yahoo’s shares have dropped in value by almost 65 percent, to their current after-hours trading value of $11.10 per share.

According to one analyst at RBC Capital Markets, Ross Sandler, "The Company is in desperate need of change and this is clearly one way to do it. Jerry was the roadblock for the last deal getting done.”  Sandler indicated that the shares could grow in value now that Yang is gone, as some investors speculate that Microsoft might make another play for the company.

Jerry Yang sent an email to Yahoo employees in which he claimed that his replacement as CEO was a joint decision between him and the Board of Directors.  We’re sure he will receive a nice fat golden parachute as part of his cooperation to step down as CEO.

Last modified on 19 November 2008
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