Yahoo Inc co-founder Jerry Yang has quit the company he started in 1995, appeasing shareholders who had blasted the Internet pioneer for pursuing an ineffective personal vision and impeding investment deals that could have transformed the struggling company.
Yang's abrupt departure comes two weeks after Yahoo appointed Scott Thompson its new CEO, with a mandate to return the once-leading Internet portal to the heights it enjoyed in the 1990s. Wall Street views the exit of "Chief Yahoo" Yang as smoothing the way for a major infusion of cash from private equity, or a deal to sell off much of its 40 percent slice of China's Alibaba, unlocking value for shareholders.
Shares of Yahoo gained 3 percent in after-hours trade. "Everyone is going to assume this means a deal is more likely with the Asia counterparts," Macquarie analyst Ben Schacter said. "The perception among shareholders was Jerry was more focused on trying to rebuild Yahoo than necessarily on maximising near-term shareholder value.
"It certainly seems things are coming to a head as far as realising the value of these assets." Yang, who is severing all formal ties with the company by resigning all positions including his seat on the board of directors, has come under fire for his handling of company affairs dating back to an aborted sale to Microsoft in 2008.
Yang's exit comes roughly a month before dissident shareholders can nominate rival directors to Yahoo's board. The remaining nine members of Yahoo's board, which includes Hewlett-Packard executive Vyomesh Joshi and private investor Gary Wilson, are all up for reelection this year. Yang's departure could be part of a broader board shake-up, said Ryan Jacob, chairman and chief investment officer of Jacob Funds, which owns Yahoo shares. "If they don't move quickly on these things, they run the risk of a proxy battle and they are doing everything they can to avoid that." The company did not say where Yang was headed or why he had suddenly resigned. CEO Thompson offered few clues in a memo to employees obtained by Reuters following the announcement.
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