Disgraced Yahoo CEO Jerry Yang to step down
In the face of a flubbed deal with Microsoft, botched advertising delivery system and tumbling stock price, Yahoo Founder Jerry Yang will step down from his position as Chief Executive of the largest display advertiser on the Web. Yang will remain as mascot and chief of Yahoo in a move that, in my opinion, is long overdue.
Yang’s last stand actually occurred back in February during Microsoft’s unsolicited takeover bid for the Silicon Valley company. While Microsoft CEO Steve Ballmer isn’t known for his bedside manner, his bid to acquire Yahoo for $31 per share or approximately $44.6 billion looks sweeter every day.
At the time, Yahoo’s shares were trading in the mid twenties and Yang believed that he was in the midst of turning the company around. Even so, the offer represented a 25 percent premium for Yahoo shareholders and Yang never really appeared to seriously consider the offer.
And why should he? Jerry Yang helped to create and build Yahoo with his own sweat and tears to become the Internet’s number two search engine and number one display advertiser. Who would want to see that hard work torn to shreds by Microsoft, whose primary intent was to gut Yahoo for its search engine technology.
However, Jerry Yang forgot that his number one duty as CEO is his fiduciary duty to Yahoo shareholders. Instead he publicly stomped around huffing about the offer and implemented an employee severance package so massive that it was basically a poison pill.
Nine months later, the offer from Microsoft doesn’t look nearly as bad. With Yahoo stocks trading at around $10 per share and confidence in Yahoo’s ability to rebound from the online advertising slump, investors are calling for Yang’s head.
In an unusual move, Yahoo is signaling the end of the Yang era before it has selected a suitable replacement for the role. Generally the thought of such a large company operating without a head would spark a further loss of confidence in a company, but not in this case.
Kara Swisher, who broke the story, is being uncharacteristically kind during Yang’s fall from grace. While I respect Jerry Yang immensely, I feel that this move is long overdue. The next year will still be a difficult one for Yahoo, but hopefully the company can find a strong enough leader to return Yahoo to its previous luster.
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November 19th, 2008
Google is going to have a bad time very soon!I have a strong feeling that with the replacement of Jerry Yang, MSN will accquire Yahoo.And this will mean a real big competition for the big G.
November 19th, 2008
I think that Yahoo was trying to coax Microsoft into a deal by making this announcement so publicly, but it’s just not going to happen.