Yahoo co-founder Jerry Yang cuts ties with company

YAHOO 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 saved 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% slice of China’s Alibaba, unlocking value for shareholders.

“Everyone is going to assume this means a deal is more likely with the Asia counterparts,” said Macquarie analyst Ben Schacter. “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 departure 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, all face re-election this year.

Respected within the industry as one of the founding figures of the web, Yang has come under fire over the years from investors and to some extent within the company’s internal ranks.

“Lots of people think he holds up innovation there with old ideas and [is] slow to decide and that he’s not an innovator himself for being at such a high level,” said one former Yahoo employee.

“People have very high expectations for founders. Everyone wants a Steve Jobs,” the employee said, referring to Apple’s co-founder who brought the company back from near death and turned it into the world’s most valuable tech company.