SHARES in internet pioneer Yahoo jumped as much as 17 per cent yesterday following the US company’s announcement that chief executive Jerry Yang was to step down, paving the way for possible acquisition by Microsoft.
Mr Yang, who co-founded the Silicon Valley firm in 1994, will take up his former role as “Chief Yahoo” when a new chief executive is appointed and he will also retain a seat on the board.
The board asked Mr Yang to come back as chief executive in June 2007 following several quarters of poor customer performance. While he has refocused the company as a leader in many areas of internet technology and services, he came in for criticism from shareholders for not completing a $44.6 billion (€35.5 billion) sale to Microsoft last January.
In an e-mail sent to all Yahoo staff following the announcement Mr Yang said: “Despite the external environment we face, the fact remains that Yahoo is now a significantly different company that is stronger in many ways than it was just 18 months ago.”
“Jerry’s resignation as CEO reflects failed promises he made while fighting off Microsoft’s offers and the board’s displeasure with his go-it-alone strategy,” wrote Jefferies Co analyst Youssef Squali in a research note.
Analysts said Yahoo’s board could now grab the opportunity to approach Microsoft under a new CEO. “The departure of Yang could signal a new position by the board to reconsider the terms of a merger with Microsoft,” said Needham analyst Mark May. He felt the move was “appropriate” after Yahoo failed to strike a deal with Microsoft, instead teaming up with rival Google to do a search advertising partnership that Google eventually abandoned.
The shares have fallen 65 per cent this year while Yahoo has struggled to make money as advertisers scale back on spending. – (Additional reporting: Reuters)
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