Tech and Web NEWS

Jerry Yang Out; Worse Than the Great Depression?

By Amarendra Bhushan for CEOWORLD Magazine Updated:November 18, 2008 Become a writer!

Time to rearrange the Deck(er) chairs? Maybe a Cuban cruise is needed now. Less icebergs. He cost (lost) Yahoo’s investors over $30 billion in the last six months. Yahoo will come up with a suitable replacement for Mr.Yang to lead company,however,it is now, all or part, clearly “up for sale” to the highest offer and don’t be surprised,it may happen before the 1st qtr.of 2009. Keep this in mind, The board which is looking for a new CEO is the same board that chose Jerry Yang?

The new CEO will face a series of difficult challenges, including trying to turn around Yahoo’s slumping online advertising business. The new CEO might also be thrust into the difficult position of trying to strike a deal with potential acquirers from a very obvious position of weakness.

“This is a company that could use additional executive experience, but you still have the same strategic issues,” said Colin Gillis, managing partner at Click Capital Research.

Reaction to the news, first reported by The Wall Street Journal, was quick. Yahoo shares, which had fallen 1.8% to $10.63 during the regular session, jumped to $11.10 in after-hours trading. Three months ago, Yahoo shares were trading at twice that level.

Yang has been under intense shareholder pressure ever since he rejected Microsoft’s offer earlier this year. Calls for his resignation have only increased as Yahoo’s business has deteriorated with the slumping economy.

The company, once the leader in Internet advertising, has been losing share in the market for Internet search to Google Inc. (GOOG) and it has been unable to make as much money per search as its larger rival. Yahoo has also been hard hit by the weakening economy because it is more heavily exposed to the slumping online display advertising market.

Yang’s dwindling options were recently reduced even further when Google pulled out of a search advertising pact that would have generated hundreds of millions of dollars in additional revenue for Yahoo.

The collapse of that deal prompted Yang to publicly declare he was open to clinching a deal with Microsoft. At one point, Microsoft offered $33 a share to buy the company.

“To this day, I’d say the best thing for Microsoft to do is buy Yahoo,” Yang said at a conference earlier this month. “We’re willing to sell the company.”

Microsoft Chief Executive Steve Ballmer, however, said at one point Yang was an impediment to striking a deal with Yahoo. The company has maintained it was no longer interested in buying Yahoo. Analysts, however, say if Microsoft is serious about mounting a credible challenge to Google, it had no clear choice other than to revisit an acquisition of the company. Microsoft declined to comment.

In addition to battling outsiders, Yang has also had to contend with restive shareholders. Activist investor Carl Icahn, who is Yahoo’s biggest shareholder and earlier this year forced himself onto Yahoo’s board, has continually pressured Yang to consider selling the company. Icahn, who earlier pushed for Yang to sell the company to Microsoft, recently said the company ought to strike a search deal with the software giant.

I hope Yang spends every waking minute of his retirement in depositions and lawsuits and doesn’t have one second for golf. He screwed his shareholders royally and should have done the honorable thing months ago and resigned. His legacy is tarnished and I hope his massive ego is as deflated as our stock price.

Consultations between Yang and the Yahoo! board about his position have been going on for “some time,” said a Yahoo! spokesman. The news broke on AllThingsDigital, which ran the memo from Yang to his troops.

Yang will remain chief executive at Yahoo! while it searches for a replacement. “I will be participating in the search for my successor, and I will continue as CEO until the board selects a new CEO. Once a successor is named, I will return to my previous role as Chief Yahoo! and continue to serve as a director on the board,” Yang wrote.

It’s an awkward arrangement. Just like the rest of his tenure.

Yang not selling to Microsoft for 33 has to be the biggest business mistake of all time. Sure am glad I don’t own any Yahoo stock ’cause I’d probably have exploded into a million pieces by now. What was he thinking ?

Is this Jerry Yang way of bailing out before the collapse with amximum compensation?

I hope that Yahoo is smart enough to cover their assets with the new CEO who ever she or he is going to be. Make sure they sign a prenuptials before he or she falls on their face and leaves the company in worse shape than it was in. CEO’s half to stop taking the company’s they run down the tubes with them. If they screw up they get no retirement or benefit package.

Here is the entire Yahoo (YHOO) press release about the development:

Yahoo! Conducting Search for New CEO
Co-Founder Jerry Yang to Step Down Following Appointment of New CEO
and Return to Former Role as Chief Yahoo! and Board Member

Yahoo! Inc. (Nasdaq:YHOO) today announced that its Board of Directors has initiated a search for a new Chief Executive Officer. Jerry Yang, co-Founder of Yahoo!, has decided to return to his former role as Chief Yahoo! upon the appointment of his successor as CEO, and he will also continue to serve on the Board. Yang, 40, assumed the CEO role at the Board’s request in June 2007, and he has led Yahoo! through a strategic repositioning and transformation of its platform.

Chairman Roy Bostock, working with the independent directors and in consultation with Jerry Yang, is leading the process of assessing potential candidates and determining finalists for consideration. The search will encompass both internal and external candidates, and the Board has retained Heidrick & Struggles, a leading international executive search firm, to assist in the process.

“Over the past year and a half, despite extraordinary challenges and distractions, Jerry Yang has led the repositioning of Yahoo! on an open platform model as well as the improved alignment of costs and revenues,” said Roy Bostock. “Jerry and the Board have had an ongoing dialogue about succession timing, and we all agree that now is the right time to make the transition to a new CEO who can take the company to the next level. We are deeply grateful to Jerry for his many contributions as CEO over the past 18 months, and we are pleased that he plans to stay actively involved at Yahoo! as a key executive and member of the Board.”

“From founding this company to guiding its growth into a trusted global brand that is indispensible to millions of people, I have always sought to do what is best for our franchise,” said Jerry Yang. “When the Board asked me to become CEO and lead the transformation of the Company, I did so because it was important to re-envision the business for a different era to drive more effective growth. Having set Yahoo! on a new, more open path, the time is right for me to transition the CEO role and our global talent to a new leader. I will continue to focus on global strategy and to do everything I can to help Yahoo! realize its full potential and enhance its leading culture of technology and product excellence and innovation.”