Nov. 17 (Bloomberg) -- Yahoo! Inc. Chief Executive Officer Jerry Yang will step down, following his failure to negotiate a takeover by Microsoft Corp. and broker an online advertising agreement with Google Inc.
Yahoo is searching for a new CEO, the company said today in a statement. Yang, 40, will continue to serve on the board. He took the top job at the 13-year-old Internet company in June 2007, promising to win back users and advertisers lost to market leader Google.
The move signals that the board may seek a new offer from Microsoft, which bid $47.5 billion for Yahoo this year. Shareholders criticized Yang and fellow co-founder David Filo for seeking a higher price while Yahoo's sales growth and profits continued to drop. The stock has lost about 60 percent since Yang took over.
Yahoo investors withheld one third of their votes for Yang's re-election to the board in August. He sidestepped a proxy fight with Carl Icahn, agreeing to give the billionaire investor three slots on the board. Yahoo's net sales growth dwindled to 3 percent last quarter from 14 percent a year earlier. Profit has dropped in 10 of the past 11 quarters.
Yahoo, based in Sunnyvale, California, fell 19 cents to $10.63 at 4 p.m. New York time in Nasdaq Stock Market trading.
Google abandoned an agreement to sell ads alongside Yahoo's search results on Nov. 5 after U.S. regulators threatened a lawsuit to block the partnership, saying it would give Google too much power. Yang had counted on the deal to generate as much as $450 million in operating cash flow in the first year.
Yahoo Chairman Roy Bostock said he had full confidence in Yang after the Google deal fell through. Yang put together the right strategic plan and made significant progress, Bostock said in a Nov. 5 statement.
Yang's plan to reverse Yahoo's slowing sales growth and profit declines was hampered by the global economic crisis, which caused advertisers to cut back on Internet spending. Yahoo announced plans in October to cut at least 1,500 jobs and reduce the number of contractors as finance, travel, retail and automotive advertisers scaled back their spending.