Yahoo co-founder Jerry Yang, the man who is credited with making the company what it is today, has stepped down from his post as chief mucker-upper at the troubled search engine outfit.
To be fair, Jerry didn’t act alone, and if it was not for him there would have been no Yahoo. But the outfit he started in 1995 has jumped from the frying pan to the fire too many times on his watch.
Shareholders had been gathering a mob including a rabid priest, a couple of screaming women and men armed with torches and pitchforks for sometime. There had been talk of a guillotine being set up outside Yahoo HQ and toothless crones had been seen knitting aggressively with large needles near potential sites.
Yang’s exit comes two weeks after Yahoo appointed Scott Thompson its new CEO, with yet another order from the board to return the once-leading Internet portal to the heights it enjoyed in the 1990s.
It might be that Thompson’s first decision was to order that Yang be kept away from him and preferably the entire outfit. Yahoo is trying to negotiate some extra cash from private equity companies and having Yang sloping around would not make the job any easier.
This is partly because Yang is one of the people who is rumoured to be making a bid for the company himself, although it is not clear at this point if that cunning plan is going ahead.
It is telling that following the announcement shares of Yahoo gained three percent in after-hours trade.
Some of this is due to the fact that Yang is believed to have stuck a spanner in the works in sorting out the mess with the Asian side of the business. Wall Street does not like him because he is interested in creating a viable company rather than give shareholders any value.
Yang is severing all formal ties with the company by resigning all positions including his seat on the board of directors.
One of his most silly decisions was turning down an overpriced offer for the company from Steve Ballmer. Ballmer was lucky that the deal fell through as it would have cost Microsoft an arm and a leg and ended up losing the company a lot of money. However Yahoo and its investors would have been laughing all the way to the bank.
Microsoft’s bid was worth about $44 billion. Its share price was subsequently kicked to death following the failure of the deal and its current market value stands at about $20 billion.
Yang blocked it because he did not like Microsoft very much and felt that the company would do fine on its own. Of course it didn’t.
The company did not say where Yang was headed or why he had suddenly resigned. CEO Thompson told employees practically nothing.
It is not as if Yang and his less public co-founder David Filo, both of whom carried the official title “Chief Yahoo,” are going away. Both own sizeable stakes in the company. Yang owns 3.69 percent of Yahoo’s outstanding shares, while Filo owns six percent as of April and May 2011.
Yang said he was leaving to pursue “other interests outside of Yahoo” and was “enthusiastic” about Thompson as the choice to helm the company. He is also quitting from the boards of Yahoo Japan and Alibaba Group Holdings.
Morningstar analyst Rick Summer told Reuters that Yang was an impediment toward anything happening. Yahoo was mired by a bunch of competing interests going in different directions. It was never clear what the board’s direction was.