Jerry Yang departs as Yahoo CEO

Will remain with the company, resuming his former role

Just 18 months after Jerry Yang replaced Terry Semel as CEO of Yahoo, the pioneering Internet search and portal company is looking for a new chief executive.

Yahoo said Monday that Yang, who co-founded the company 14 years ago with David Filo, will step down when a successor is found, at which time he'll resume his former role as Chief Yahoo. He'll remain a board member.

Yang became CEO in June 2007 after Semel was forced from the job because he was blamed for allowing Google to surpass Yahoo and become the planet's dominant Internet company.

But at least Semel could boast that Yahoo's stock rose 148% under his six-year reign. Under Yang's 18-month stint, the stock has plunged 62%, and Yang didn't curry much shareholder favor when he dismissed a bid from Microsoft to buy the company for $33 a share. The stock closed Monday at $10.63.

Carl Icahn, a Yahoo board member, is said to favor re-opening negotiations with Microsoft for a buyout, though there are no indications that Microsoft remains interested in paying anything near the $47.5 billion it had previously offered for the company. Yahoo's market cap was only $14.7 billion on Monday.

Yahoo said it will search for a new CEO within the company and externally, and speculators quickly identified a likely candidate from each camp: Yahoo president Susan Decker and News Corp. president and COO Peter Chernin.

According to published reports, Chernin has been considering giving up his post at News Corp. once his contract expires at the end of the company's 2009 fiscal year.

Yahoo has hired executive search firm Heidrick & Struggles to evaluate CEO candidates. Yang will continue as CEO during the search.

In a memo to employees Monday, Yang defended his CEO tenure.

"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," he said.