Yahoo! Begins CEO Search; Jerry Yang To Step Down

When Yang took over in 2007, Yahoo! was already under pressure. Since then, things have gotten worse, with events such as an unsolicited bid by Microsoft in February, which Yahoo! turned down, battles with investor Carl Icahn (with Icahn eventually scoring a seat on the Board of Directors), a search ad deal with Google that Google eventually backed out of, and let's not forget the currently economic downturn which is affecting just about all businesses.

As Microsoft once offered as much as $33 / share for Yahoo!, whose stock now sits at $10.63 (though up in after-hours trading on this news), to the outside world, it ain't looking like Yang did a bang-up job.

Certainly, as soon as Icahn secured a seat on the board, it was inevitable, IMHO, that Yang was a goner. After all, Icahn once said of Yang, when discussing replacing the entire Yahoo! board, that a new board would:

"Move expeditiously to replace Jerry Yang with a new CEO with operating experience."

Of course, he backed off that and made nice when he got his Board set, but that was, of course, all just PR.

In a press release, Chairman Roy Bostock said:

"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. 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."

Jerry Yang's statement in that same press release was:

"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. 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."

Boomtown also had the entire contents of Yang's memo to his "yahoos," as he liked to call them. Typically, sans punctation, doesn't say much more than one might expect. He said:

To: all yahoos
Fr: Jerry
Subject: update

yahoos -

i wanted to address all of you on the news we’ve just announced. the board of directors and I have agreed to initiate a succession process for the ceo role of yahoo!. roy bostock, our chairman of the board, is leading the effort to identify and assess potential candidates for consideration by the full board. the board will be evaluating and considering both internal and external candidates and has retained heidrick and struggles to help in this effort.

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.

last june, i accepted the board’s request that i assume the ceo role to restructure and reposition the company as a whole in order to more effectively meet the fast-changing needs of both users and partners. since taking on the ceo role, i have had an ongoing dialogue with the board about succession timing. thanks in large measure to your tireless efforts, we have created a more open, competitive yahoo! and we believe the time is now right to transition to a new ceo who can take the company to the next level.

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. this only makes it all the more essential that we manage this opportunity to leverage the progress up to this point as effectively as possible. i strongly believe that having transformed our platform and better aligned costs and revenues, we have a unique window for the right ceo to take ownership over the next wave of mission-critical decisions facing the company.

all of you know that I have always, and will always bleed purple. i will always do what I think is right for this great company. while this step will be an adjustment for all of us, i know it’s the right one. i look forward to updating you on this process as soon as the board has developments to share, and will continue to do everything i can to make yahoo! fulfill its full potential.

thank you,
jerry

So who's going to replace Yang? Boomtown first broke the story, and they speculated that while Yahoo! President Sue Decker is under consideration, she's too closely tied to Yang for serious consideration, and that an outsider, perhaps News Corp. COO Peter Chernin, former AOL head Jon Miller, former eBay CEO Meg Whitman, former Yahoo COO Dan Rosensweig, and even former Microsoft exec Kevin Johnson, now CEO of Juniper Networks, who ironically led the takeover bid for Yahoo! earlier in the year.

Way, way, more to come.