Friday, 21 November 2008

The rise and fall of Yahoo CEO

Yahoo co-founder Jerry Yang is stepping down after a rocky tenure as chief executive of the Internet company. Among, the original Silicon Valley dotcom billionaires, Yang was named CEO in June 2007 after Terry Semel exit.

As CEO, Yang had the task to turn around the company's dwindling fortunes. However, the rejection of the Microsoft offer and a failed advertising partnership with Google marred his brief tenure. Here’s tracing the rise and fall of Yang.

Yahoo was born
Born in Taiwan on November 6, 1968, Yang moved to the United States with his family when he was around 10 years old and was raised in San Jose, California.

While studying electrical engineering at Stanford University in California, Yang and a classmate, David Filo, created a directory for websites in their spare time called "Jerry's Guide to the World Wide Web."

Yang and Filo founded Internet portal Yahoo in 1995. Yang became an instant billionaire the following year when the company went public.

Yahoo survived dotcom bubble burst five years later and despite its recent struggles has remained one of the most popular sites on the Web, drawing millions of users a day as a gateway to the Internet. Yahoo mail still is the second most popular mail globally.

Among the world’s richest
According to Forbes magazine, Yang is the 524th richest person in the world with a fortune estimated at $2.23 billion.

Despite his wealth, Yang has remained heavily involved in running Yahoo. Some shareholders have accused him of putting his personal affection for the company he created over the interests of its shareholders.

Microsoft offer proves ‘costly’
Earlier this year, Yang rejected a $33 per share offer by Microsoft for Yahoo worth a total of more than $47 billion.

Yahoo has since been trading at between $10-12 a share, and rejection of the Microsoft offer led to a shareholder revolt against Yang.

Microsoft CEO Steve Ballmer huffily withdrew the offer after Yang sought $37 per share. The negotiating breakdown triggered a shareholder revolt led by billionaire investor Carl Icahn, who called for Yang's ouster in July.

Icahn reached a truce that put him and two allies on Yahoo's 11-member board, but he still has been lobbying for Yahoo to pursue a deal with Microsoft that would either involve selling the company in its entirety or just its search engine, which ranks a distant second to Google Inc.

Failure of Google ad deal
After squandering the opportunity to sell to Microsoft, Yang tried to boost Yahoo's profit by forging an advertising partnership with Google.

But that backup plan fell through two weeks ago when Google walked away from the deal to avoid a court battle with the US Justice Department, which had concluded the partnership would have throttled competition in the online advertising market.

On the day the Google partnership collapsed, Yang publicly said he thought Microsoft should hook up with Yahoo. But Ballmer threw cold water on the idea the next day by declaring he doubted a deal could be worked out.

Given the acrimony surrounding the breakdown of the earlier talks between Ballmer and Yang, some analysts have speculated Microsoft will be more willing to renew negotiations if Yahoo had different leadership.

Plunging stock
Yang had also been exploring a possible acquisition of another fading Internet star, AOL, but most analysts panned the idea as a desperation move that threatened to hurt Yahoo more than it would help.

As Yahoo shares sank, a major acquisition became a moot point anyway because the depressed stock price made it more difficult to finance a deal. Yahoo said Yang will step down as CEO once a replacement is named but will retain a strategic role in the Sunnyvale, California, company.

"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," Yang said in a statement.

"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," he said.

"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," he said.