Yahoo co-founder Jerry Yang has left the company, the latest dramatic change at the top of the embattled Internet company.
Yang, who was involved in both Yahoo‘s rise to Internet titan inthe late 1990s and early 2000s and its fall from grace in the past sixyears, resigned effective Tuesday from all his posts at the company.
Specifically, he quit his position on Yahoo’s board and on theboards of Yahoo Japan and Alibaba Group Holding, the company said in astatement.
“My time at Yahoo, from its founding to the present, has encompassedsome of the most exciting and rewarding experiences of my life.However, the time has come for me to pursue other interests outside ofYahoo,” Yang wrote in a letter to Board Chairman Roy Bostock.
Thompson takes over
Yang also said in the letter that he is “enthusiastic” about the recentappointment of former PayPal President Scott Thompson asYahoo CEO and about the company’s prospects for future success.
“It’s sad, because Jerry has been such an institution in Silicon Valley for so long, buthis exit gives Thompson the runway he needs to make decisions and notbe second-guessed,” said Charlene Li, an Altimeter Group analyst, in aphone interview.
Yang has been a towering figure at Yahoo, having been not only aco-founder but also CEO of the company. “It’s hard to operate in theshadows of someone like that. This departure really frees Scott tostart with even more of a clean slate,” Li said.
More exits to come?
Yang’s exit may be the first of several others on the board, which hasbeen criticized by shareholders and financial analysts who believe itis responsible for many of the company’s troubles, said industryanalyst Greg Sterling of Sterling Market Intelligence.
“Maybe Yang is the sacrificial lamb,” he said in a phone interview.”There may be more board resignations and substitutions coming.”
Gartner analyst Allen Weiner sees Yang’s departure as a vote ofconfidence, to an extent, that Yahoo is strong enough to succeed in thenew digital world without his guidance. “Given its future as a digitalmedia company, Yang’s lack of media expertise makes him somewhat of anunnecessary cog,” Weiner said via email.
Regardless of the internal events that led to Yang’s exit, it willdefinitely play to those outside as a sign that Yahoo is embarking on anew beginning under its new CEO, the analysts said.
“It’s a very clear signal that this is a new page, that anything that happened in the past isn’t necessarily the path they’ll take in the future,” Li said.
Added Weiner: “His departure could be a symbolic gesture to separatethe company from its past as much as possible.”
Yang co-founded Yahoo with David Filo in 1995, but Yang hashistorically been the most visible of the two. Filo remains with thecompany.
The two launched Yahoo as one of the first Web directories and search engines. It evolved into abroad Web portal that provided online communications services such as email and a variety of content,such as news, finance information, entertainment content and the like.
Yahoo ruled as a leading Web portal until the mid-2000s, when Google started gaining strength,thanks to its superior search engine, which would also give Google adominant position in the large and profitable market for searchadvertising.
Microsoft’s hostile bid
Terry Semel, who had been Yahoo’s CEO since 2001, finally got fired inmid-2007. A shift in power from traditional portals such as Yahoo, AOLand Microsoft’s MSN to Google became evident, as a critical mass of Websurfers made Google the center of their online activities.
At that point, Yang stepped in as CEO and pledged to lead Yahoo on acomeback, but about six months into his tenure as CEO he had to throwout his playbook in order to deal with a hostile takeover from Microsoft inearly 2008.
Microsoft’s attempt to buy Yahoo became a corporate soap opera thatgenerated plenty of headlines in the first half of 2008, as Yang andthe Yahoo board resisted the takeover, arguing at different points thatYahoo was worth more than what Microsoft was offering.
Microsoft eventually gave up, after a final offer of about $47 billionwent nowhere, but the months-long episode clearly sidetracked anddistracted Yang and Yahoo’s staff in general.
Yang, who had until then been a largely charismatic and well-likedfigure, also emerged with a tarnished image, as some financial analystsand company shareholders blamed him for the failure of Microsoft’sattempted buyout.
Months later, in January 2009, Yang stepped aside as CEO, handing overthe reins to Carol Bartz. During her tenure,Yang remained largely backstage, making few public appearances.
Bartz fired last fall
After the board fired Bartz last September, rumors swirled that Yangwas trying to put together a group of investors to buy back the companyand take it private.
Although it’s still not clear whether Yahoo will remain in its currentform, be taken private or be sold whole or in parts, the board lastweek picked PayPal’s Thompson as the permanent replacement for Bartz, amove viewed by some as an attempt to stabilize the company after monthsof uncertainty.
In Tuesday’s statement, Chairman Bostock called Yang “a visionary and apioneer” who has provided “unique strategic insights” to the board.”While I and the entire Board respect his decision, we will miss hisremarkable perspective, vision and wise counsel. On behalf of theBoard, we thank Jerry and wish him all the very best in his futureendeavors,” Bostock said.
Meanwhile, Thompson said Yang gave him a “warm welcome” and that heleaves “a legacy of innovation and customer focus for this iconicbrand.”
As Thompson begins his tenure, Yahoo is viewed as a financiallyunderperforming company that has lost its technology edge, resortingmainly to latching on to hot trends established by others, such asGoogle, Facebook, Twitter and Apple.