Yahoo co-founder Jerry Yang’s tenure as CEO of the troubled Internet giant took a key turn Nov. 17 when he announced his resignation under apparent pressure from the company’s board of directors.
But Yang won’t be leaving anytime soon. The company announced in a press release late in the day that Yang would remain in the CEO position until his successor is appointed and that he would stay on as a member of the board.
In an e-mail to all Yahoo employees, Yang, who had been under a great deal of criticism in the wake of a botched merger with Microsoft, said he will return to his former role as so-called Chief Yahoo when a new CEO is named.
A substantial number of Yahoo shareholders were in favor of accepting a $47 billion bid to sell the company to Microsoft in February 2008. But Yang and a majority of the board members were against it, and they prevailed.
Microsoft then returned with a smaller offer to buy Yahoo’s crown jewel-its Internet search business, second in size, scope and income only to Google. But Yahoo also turned that offer down.
Yang and the board faced a number of unhappy shareholders at the company’s annual meeting in San Jose Aug. 1, but they were steadfast in their desire to remain independent from the world’s largest software company.
If Yahoo had been stronger financially in the last two years, it’s possible Yang could have won out and remained as CEO. But the company stock value has dropped from a recent high of $33.63 in October 2007 to $19.80 on Aug. 1. The stock continues to slip; it closed at $10.63 on Nov. 17.
Microsoft CEO Steve Ballmer has since said although there still might be a chance for a deal, he doesn’t believe it will ever happen.
Entrepreneur Carl Icahn, who owns about $1 billion worth of Yahoo stock-almost 5 percent of the company-tried to facilitate the Microsoft takeover over a six-month period. As part of a deal to placate him, the Yahoo board offered Icahn and two people of his choice seats on the board.
Icahn is expected to join the board in January 2009.
Will Microsoft Make Another Offer?
Eric Jackson, president of one of the company’s biggest investors, Ironfire Capital, which owns about 3.2 million shares, said he believes all is not lost for an eventual Microsoft takeover. Jackson said he believes Microsoft will return in 2009 with a third offer.
“The company [Yahoo] needs to make some fundamental changes if it’s going to improve its performance and stock price,” Jackson said after the Aug. 1 shareholders’ meeting.
“Yahoo is too bloated right now; they need to reduce head count, focus on core businesses and divest some of their holdings that aren’t making any money,” Jackson said. “But it’s only about the second inning [of the company comeback], although it’s been the second inning for a long time. There have been a lot of pitches and foul balls.”
Yang, 40, replaced Terry Semel and assumed the CEO role at the board’s request in June 2007, and has led Yahoo through a strategic repositioning and transformation of its platform.
Yang and Stanford University classmate David Filo co-founded Yahoo in 1995. Yang’s net worth is estimated to be about $2.3 billion; this year he was ranked No. 524 in Forbes’ listing of the richest people in the world.