Jerry Yang to step down as Yahoo's CEO

— 6:00 AM on November 18, 2008

At this point, Yahoo co-founder and CEO Jerry Yang is probably kicking himself for not making things work with Microsoft. The Associated Press reports that Yang has decided to step down from his position as soon as the company finds a replacement. Yahoo has already started "interviewing candidates" both inside and outside the firm.

Yang announced his decision less than two weeks after seeing Google pull out of a planned advertising partnership—Yahoo's "plan B" after the Microsoft merger negotiations fell apart earlier this year. As the AP points out, Yahoo shareholders (including activist investor Carl Icahn, who ended up joining the web company's board) were none too happy with the way Yang handled things with Microsoft. And who could blame them: earlier this week, Yahoo shares were worth just a third of the $33 Microsoft offered to pay.

With Yang soon to be out of the picture, renewed buyout negotiations seem probable. The AP points out that Yahoo's stock rose 4% in extended trading after yesterday's announcement, and it quotes a UBS analyst as saying, "We still believe Microsoft will eventually own Yahoo . . . Jerry moving out of the CEO role may accelerate this." Another analyst commented, "The shareholders were ready to pick up pitchforks and torches . . . If Jerry wasn't a founder, he already would have been gone [months ago]."

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