It's been a tumultuous year for Yahoo!, by anybody's standards. After rejecting Microsoft's hostile - yet generous - takeover bid in the early months of 2008, it thought it had found a safe haven in its paid search advertising deal with Google. Five months later and Google's abandonment of the deal seems to have precipitated the desire for a leadership change, as Yahoo!'s CEO Jerry Yang officially announced his resignation yesterday. One of Yahoo!'s original founders, Yang's 16 month long leadership of the search engine company has been blighted by criticism from the outset. Reports suggest that Yang made the decision to step down last month, but will occupy the position until a suitable replacement is found, after which he will retire to a place on the Yahoo! board as 'Chief Yahoo!'.
Roy Bostock, Yahoo!'s chairman, said in a statement: "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."
In a memo sent to Yahoo! employees on Monday, Yang expressed his deep affection for Yahoo!, stating: "All of you know that I have always, and will always bleed purple [the company's trademark colour]. I will always do what I think is right for this great company. While this step will be an adjustment for all of us, I know it's the right one."
The move comes after a spate of bad news for the search engine. Last month, it revealed a staggering 64 per cent slump in its third quarter profits and a 10 per cent cut in its workforce: around 1500 jobs. Shortly afterwards, Google caved to legal pressure and cancelled its paid search deal with Yahoo! - a move that Yang described as "disappointing".
Following this development, Yang even suggested that Microsoft 'should' buy Yahoo!, although the feeling was not reciprocated by Steve Ballmer, the software giant's chief executive. Resultantly, at the close of trading in New York yesterday, Yahoo!'s share price closed at a historic low of $10.63; in June, Microsoft's final bid for the company offered investors the significantly higher sum of $33 a share.
Yang's perceived failure to improve Yahoo!'s outlook seems to have been widely accepted as a step in the right direction for the search engine - but who will be his successor? CNNMoney suggests that the candidate is likely to come from outside Yahoo!, ruling out its current president Sue Decker. What's more, reports that Yahoo! is currently in talks with AOL-owner Time Warner could influence whoever gets the position. While nothing is certain just yet, one thing's for sure: Yang's heir will have to draw on all his or her experience and wisdom to guide Yahoo! in the right direction.
