Yahoo’s Jerry Yang to Step Down, as a Search for New CEO Commences
Yahoo CEO Jerry Yang will step down from his job as CEO as soon as the board finds a replacement for him, in what sources close to the situation call a joint decision by him and the company’s directors.
Yahoo (YHOO) will announce the move within the next hour. [UPDATED: Yahoo confirms the move in its official press release.]
But, in a memo to Yahoo’s employees, obtained by BoomTown, Yang confirmed the pending departure, writing: “…we believe the time is now right to transition to a new ceo who can take the company to the next level.”
Yahoo has hired Heidrick & Struggles, the well-known executive search firm, to evaluate candidates, both internally and externally.
After a replacement is found, which the company hopes will be quickly, sources said, Yang will resume his former title as Chief Yahoo and will also remain on the Yahoo board.
While did-he-walk-or-was-he-pushed speculation will no doubt run rampant, sources said Yang already has and will play an important role in the search for his replacement.
Sources close to the board expect the choice will end up being an outsider and is not likely to be current Yahoo President Sue Decker, although she is being considered for the job.
But both she and Yang have been closely affiliated with each other as the company has struggled to right itself after a tumultuous year and its stock price has plummeted.
Yahoo shares closed today at $10.63 after trading at historic lows for a while and giving the company a valuation of only $14.7 billion.
While Yahoo’s board has some execs in mind to become CEO, obvious candidates include News Corp. (NWS) COO Peter Chernin, as well as former AOL head Jon Miller, former eBay (EBAY) CEO Meg Whitman, Google (GOOG) ad exec Tim Armstrong, former Fox Interactive exec Ross Levinsohn and former Yahoo COO Dan Rosensweig (who is currently with the Quadrangle Group).
BoomTown would also throw in former Microsoft top exec Kevin Johnson, now CEO of Juniper Networks (JNPR), and who led the software giant’s abandoned takeover bid against Yahoo earlier this year.
According to sources, both Yang and the board have been discussing the move for months, although Yang has been saying quite explicitly in public that he was going to stay in place to see through the many changes he has made in his 16-month tenure.
In a recent interview with me, in fact, Yang said about his determination to lead:
“In this uncertain environment, I think I am absolutely the right person. Times like this require a leader who really understands this company and its customers, and I think I do. The world is a different place today than even a month ago and I think I am the best person to guide Yahoo through this volatile time.”
In fact, it has always been a volatile time for Yang at Yahoo. He took over suddenly last June from former CEO Terry Semel, whose departure also came after Yahoo’s struggles became increasingly apparent.
Things only got worse for Yang, due to both his own and previous management missteps and also massive external forces, including a hostile takeover attempt by Microsoft (MSFT), which was soon followed by a proxy fight by activist shareholder Carl Icahn.
The Microsoft bid–which was $31 a share–was abandoned, and Icahn dropped the proxy fight, with Icahn joining the board with two other directors he had handpicked.
And while Microsoft has been interested in a deal related to Yahoo’s search business, its CEO, Steve Ballmer, has categorically ruled out a renewed bid.
Yahoo also saw its search business decline in the face of dominance in the market by Google (GOOG), which had ironically started its then-nascent business on Yahoo as its search partner.
Worse still, Yahoo’s strong graphical ad business has suffered badly in the midst of the current economic meltdown.
There has also been an exodus of major executives over the last year, along with recently announced layoffs of 10 percent of the company, which are set to take place Dec. 10.
In addition, Yahoo’s controversial search ad deal with Google collapsed and its talks to merge with Time Warner (TWX) online unit AOL have dragged on.
With all this, sources close to the company said that both Yang and the board felt the company needed another leader to take it to the next level and complete the turnaround efforts Yang has been trying to pull off.
“It was time for someone else,” said one source close to the board.
More, obviously, to come…
Please see this disclosure related to me and Google.
Comments
Sadly for me I got hit with margin calls all of the last few weeks and own a fraction of the shares that I once owned. He should have done the honorable thing months ago and resigned and saved his shareholders billions. He tarnished any legacy that he once may have had because of his oversized ego. He should have done the MSFT deal in Febuary and he’d be a hero, instead he’s a pathetic figure that is loathed by just about everyone.
Posted by Mike Kane at November 17th, 2008 at 6:13 pmHonestly, you guys have no idea how pissed I am at how misleading YHOO has been to its shareholders. One day we’re hearing from Yang and his stooge Roy about how Yang is the only guy set to lead the company and how no one else knows YHOO like Yang, and now where hearing that this conversation has been happening for months. Couldn’t Yang have done the honorable thing months and months ago and saved us about $35b in the process? If I hadn’t lost so much on this moron I’d sue them into oblivion. Clearly the board was asleep at the switch and forgot that they had some responsibility to the shareholders. I hope someone with a lot more money then I have left sues these guys into oblivion. BTW, nice timing on Icahn’s article lecturing about board responsibility.
Posted by Mike Kane at November 17th, 2008 at 6:46 pmM:
Timing is everything.
Posted by Kara Swisher at November 18th, 2008 at 12:39 amIt was delightful to see Bill and Steve sharing a stage and reminiscing about their stuff, but I was surprised that Bill (gadgets) and Steve (widgets) didn’t settle the debate about the original inventor of the widget.
One can never have too many widgets. Somebody codes something you never even dreamed of wanting - suddenly everybody
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Posted by erdem ela at April 17th, 2009 at 10:56 pmbedava ligtv izle
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şiir türleriçetchatsohbet needs a whole bunch of widgets because they don’t impinge too much on the screen/template real estate.