Microsoft deal with Yahoo! may be back on cards as Yang steps down

18 Nov 2008

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The decision by Yahoo! founder Jerry Yang last night to step down as chief executive may mean that a potential buyout of the company could be back on the cards.

Microsoft has been pressing ahead with its own strategy for the internet and competing with Google in the online space, and last week revealed deals with online firms Twitter, Flickr and LinkedIn – to name a few – to make Windows Live the centre of the internet.

Earlier this year, Yang and the Yahoo! board earned the enmity of shareholders – particularly corporate raider Carl Icahn – over their handling of Microsoft’s US$47bn bid to buy the company, leading to Microsoft abandoning the deal.

In recent weeks, an advertising link-up with Google fell through after US regulators expressed dissatisfaction with the idea of a Google/Yahoo! dominance of the internet advertising industry, and this may have been the final straw.

Yang had argued that the Microsoft deal undervalued Yahoo!. He is understood to have agreed to remain as director with Yahoo! and will step down as chief executive as soon as a successor is found.

In an email to staff, he said that a new chief executive with the vision to take the company to the next level is needed.

His step-down has rekindled speculation that Microsoft will return to the negotiating table.

Yahoo! president Susan Decker is tipped as a possible successor to Taiwan-born Yang.

By John Kennedy

Pictured: Yahoo! founder, Jerry Yang

Editor John Kennedy is an award-winning technology journalist.

editorial@siliconrepublic.com