Jerry Yang is exiting the Yahoo!
Inc (YHOO). board and its management team, the latest casualty of an
overhaul that led to the ouster of Chief Executive Officer Carol
Bartz and left the company in search of strategic options.
Yang, who started Yahoo in 1995 with David Filo, also left
the boards of Yahoo Japan Corp. and Alibaba Group Holding Ltd.,
Asian Web companies Yahoo partly owns, Yahoo said today in a
statement. Scott Thompson, former president of EBay Inc. (EBAY)’s
PayPal unit, was named CEO on Jan. 4 after a four-month search.
“Jerry’s thrown in the towel,” said Colin Gillis, an
analyst at BGC Partners LP in New York, who rates the stock a
“hold” and doesn’t own it. “He founded the company -- this is
his baby.”
Yang, 43, whose company helped pioneer Web content and
searching in the 1990s, exits Yahoo as it struggles to compete
with Google Inc. (GOOG) and Facebook Inc. for online users and
advertising dollars. As it seeks ways to revive the company and
placate impatient investors, Yahoo has considered selling its
stakes in its Asian partners, including Alibaba, and has fielded
proposals from private equity groups to sell a stake in itself.
“By clearing out some artifacts of the past, it’s symbolic
of the company’s desire to move forward,” said Allen Weiner, an
analyst at Gartner Inc. in Austin, Texas. “With Jerry out of
the way, it will perhaps make negotiations with the folks at
Alibaba easier.”
Alibaba Group spokesman John Spelich didn’t immediately
respond to messages left seeking comment.
‘Chief Yahoo’
Yang, who had the position of “chief Yahoo,” was CEO from
June 2007 to January 2009. After the Sunnyvale, California-based
company rejected an acquisition offer from Microsoft for $47.5
billion, Yang was replaced by Bartz as CEO, who was fired by the
company in September 2011.
Yahoo investor Third Point LLC late last year demanded two
board seats and asked for Yang to step down as a director. Third
Point CEO Daniel Loeb cited the “board’s inability -- or
perhaps unwillingness -- to properly solicit true strategic
alternative bids, let alone to negotiate them,” in a November
statement. Third Point already had called for Chairman Roy Bostock to step down last year.
Yahoo shares fell less than 1 percent to $15.43 at the
close in New York today. They jumped as high as $16.48 after the
announcement. The stock declined 3 percent last year.
Yahoo’s Market Value
Born in Taiwan and raised in San Jose, about 10 miles south
of Yahoo’s headquarters, Yang co-founded Yahoo as a Stanford
University doctoral student. In 1996, Yang and Filo took the
company public with CEO Timothy Koogle.
As traffic on the Web soared, so did advertising revenue,
helping Yahoo’s stock market value surge to more than $100
billion. Then the market collapsed during the dot-com bust.
After peaking in January 2000, Yahoo shares lost 97 percent of
their value before bottoming out in September 2001. Today, the
company is valued at about $19.1 billion.
Yahoo had already been through management and identity
shifts before Bartz’s reign. Terry Semel, a Warner Bros. movie
executive who knew Yang from an Allen & Co. media conference in
Sun Valley, Idaho, replaced Koogle as CEO in 2001 and stepped up
efforts to make the company a media hub. While Semel presided
over five years of more than 20 percent sales growth, the
company lost its lead in Internet ads to Google.
When Yang became CEO in June 2007, he vowed to renew the
struggle against Google’s growing dominance.
“I’m ready to dig in and make sure we can take Yahoo to
the next level,” Yang said at the time.
Microsoft (MSFT)’s Offer
In 2008, after Yang failed to jump-start sales growth,
Microsoft stepped forward to acquire Yahoo -- an offer that Yang
spurned. Yang tried to assuage investors with a partnership with
Google, though that effort fell apart. The company later forged
an agreement with Microsoft, the world’s largest software maker,
to share Internet-search operations.
Yang’s handling of the Microsoft negotiations rankled
investors at the time, including billionaire Carl Icahn, who
successfully lobbied to add new board members in 2008. Icahn,
who is no longer on the board, sold the last of his stake in
2010.
“My time at Yahoo, from its founding to the present, has
encompassed some of the most exciting and rewarding experiences
of my life,” Yang said in a letter to Bostock included in
today’s statement. “However, the time has come for me to pursue
other interests outside of Yahoo.” Yang didn’t respond to a
request for an interview.
Yang still owns 46.6 million shares, or 3.8 percent of the
company’s outstanding stock, according to a Nov. 25 filing.
“We appreciate Jerry’s comments and share his enthusiasm
for the company’s prospects,” said Bostock. “With Scott
Thompson leading an outstanding team of Yahoos to deliver
innovative products and an engaging customer experience, Yahoo’s
future is bright.”
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