20 Nov
Yahoo’s Yang to step down as CEO
by Martyn Williams, Nancy Gohring and James Niccolai, IDG News Service
After a bungled buyout immolate from Microsoft, a deal with Google that fell into two parts and brace rounds of layoffs, Jerry Yang is calling it quits and stepping laterally as principal person executive of the corporation he cofounded, Yahoo said Monday.
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Yang, who became CEO in June 2007, bequeath take on his forgoing title of “Chief Yahoo” once a successor is found, and besides remain on the board.
He has been under intense pressure from shareholders in recent weeks for a string of perceived missteps that began in February with Microsoft’s $45 billion offer to buy Yahoo. Microsoft was offering $33 per share for its Internet rival but Yang rejected that price as too low.
Eventually Microsoft withdrew its offer and Yang went on to talk with News Corp. in all parts of a venture with MySpace and with TimeWarner about a merger through AOL, but the talks came to nothing. In June he struck an advertising bestow with Google but that too fell apart in the face of opposition from the U.S. Department of Justice.
With Yahoo shares closing under $11 on Monday, the Microsoft offer, by the benefit of hindsight, looks like a very attractive the same, thus the inquietude from some shareholders.
Yang appears to recognize this and at an Internet conference in San Francisco two weeks ago made a thinly veiled initiation to Microsoft to come back to the negotiating table.
“To this day I would say that the with most propriety thing for Microsoft to do is to buy Yahoo,” he said. When quizzed on whether he would stick to a higher price that he demanded back in May he added, “Oh no. At the direct excellence, whatever the price is.”
But Microsoft CEO Steve Ballmer didn’t bite and said a couple of days later, “We are not interested in going back and re-looking at every acquisition. I don’t know why they would be either, frankly. They turned us down at $33 a share.”
Yang was seen by many as the main hindrance to a divide with Microsoft, but that doesn’t mean a extent is now a great quantity more likely to happen, said analyst Charlene Li, founder of Altimeter Group. “The board was behind him and they’re still there, and Yang is still there, so I don’t contemplate a Microsoft deal is imminent,” she said.
The move to appoint a new CEO is not surprising, said Greg Sterling, one analyst with Sterling Market Intelligence. “There had been public view about this for several months and as they went through sundry quarterly earnings calls and the condition of the company wasn’t improving, I think there was some sense that you needed new leadership,” he said.
While Sterling credits Yang with some good ideas for turning around the company, “there’s a way in which maybe his personality isn’t well suited for what the company needs, which is maybe a more forceful leader who can restore confidence,” he said.
While the drawn-out attempt by Microsoft to buy Yahoo probably led in part to Yang stepping aside, subsequent factors besides likely played a role. “I think it’s not so much a Microsoft thing as it is the demise of the Google deal and a failure to find another alterative to the merger,” Sterling said.
It’s hard to say if a new leader at Yahoo will reignite a deal through Microsoft, Sterling said. The cynic’s view is that installing a new chief “saves stand over against for everyone” and let’s someone new come in to occasion a deal with Microsoft, Sterling said.
Speculation will turn after this to Yang’s replacement. Yahoo President Sue Decker is one obvious candidate, otherwise than that the fact she wasn’t named instantly as Yang’s re-establishment raises a question about whether she will be picked. “Who knows, she’s got to be in the running according to it; she’s very good,” Li said.
Li praised Yang as centre of life very smart and a “tremendous asset” for Yahoo, especially for the strategy he has helped put in place since Terry Semel’s departure last year. Yahoo is initiatory its various services for developers to build new services onward top of, as a way to drive other traffic.
But Yang hasn’t been likewise good at communicating the strategetics and energizing Yahoo’s partners, advertisers and end users, Li said.
“He could probably get there eventually, but it takes a different type of skill to get that buzz hindmost and get people excited well-nigh Yahoo again,” she said.
