Yahoo Co-Founder Jerry Yang Resigns from Yahoo

Co founder Jerry Yang
Co founder Jerry Yang

Yahoo co-founder and board member Jerry Yang announced on Monday that he is resigning from Yahoo’s board, including his role as board member of Yahoo Japan and Alibaba. Yahoo shares rose 3% on the news. Mr. Yang, 43, co-founded Yahoo in 1995 along with David Filo while the two were attending graduate school at Stanford University.

Yahoo quickly grew to prominence as a pioneer of technology in the late 1990’s, offering internet users a one stop web portal to check e-mail, read news stories, and search the internet. Yahoo’s IPO launched in 1996 and witnessed its shares jump in an era when internet start-up companies such as Yahoo were becoming all the craze in the Silicon Valley and Wall St. was betting big on their rise.
 In 1999 Yahoo’s market cap nearly reached 120 billion and the technology company seemed unstoppable. But as Yahoo entered the 21st century, the company failed to sustain its momentum in technology while new start up tech companies such as Google took over Yahoo’s market share and gradually eroded their search and advertising revenues.
In February 2004 Yahoo dropped Google as the default search tech provider for its U.S. based sites and made a push to become the web’s top search engine. 
One year later in 2005, Mr. Yang became friends with Jack Ha, CEO of Chinese tech company Alibaba. Yahoo allowed Alibaba to operate its Chinese operations while acquiring a 40% stake in Alibaba for 1 Billion. The 40% stake in Alibaba was recently estimated at 14 billion, according to Wall St. Journal.
Mr. Yang became CEO of Yahoo from 2007-2009. During Mr. Yang’s tenure as CEO of Yahoo, he spurned a $ 44.6 billion Microsoft takover bid in February 2008. Yahoo shareholders became infuriated with the decision and widely criticized his rejection of Microsoft’s generous takover bid.
Carol Bartz was hired to become Yahoo’s CEO in January 2009. Similar to Mr. Yang’s fate, she was unable to turn Yahoo and its falling stock price around.  In July 2009, under Carol Bartz’s leadership, Yahoo made an agreement to have Microsoft’s Bing operate its own search engine, once the bedrock of the company.
Since 2009, Google and Facebook have been steadily gaining market share, taking away advertising and search revenue from Yahoo. 
On January 5, 2012 Yahoo hired Paypal CEO Scott Thompson to become their fourth CEO in five years to lead Yahoo.
Today, Yahoo has a market cap of 19.14 billion and over 700 million visitors per month.
Activist investor Daniel Loeb of Third Point, has recently called for the removal of Mr. Yang and Mr. Roy Bostock, another board member, from Yahoo’s board.
Speculation continues to build about further changes that CEO Scott Thompson plans to make at Yahoo.
Recent reports have suggested that Yahoo may outsource work to Eastern Europe and Asia where labor costs are lower than in the U.S.
Some tech insiders believe that Yahoo is paving the way through Mr. Yang’s resignation to have Yahoo sell off its Asian assets of Alibaba and Yahoo Japan, estimated to be valued at 17 billion, according to New York Times
Investing in Yahoo’s core U.S.  business operations with the profits from their Asian assets and “going back to basics” to increase revenues and profit margins may be needed for Yahoo to restore investor confidence and re-establish their relevance in an emerging tech industry where social networking and offering good content is increasingly becoming more important.
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