Jerry Yang, ‘Chief Yahoo,’ Steps Down From Board

Jerry Yang rode Yahoo Inc.'s swift rise and subsequent decline over 17 years. Now the co-founder of the onetime dominant Internet company has decided to stop hanging on.


Mr. Yang, 43 years old, said Tuesday he was resigning from Yahoo's board, severing ties to the company he co-founded with David Filo in 1995 while both were Stanford University graduate students. Mr. Yang also said he would leave the boards of Yahoo Japan Corp. and Alibaba Group Holding Ltd., in which Yahoo owns significant stakes.
Mr. Yang has been under pressure for weeks, grappling with criticism over his multiple roles at the Sunnyvale, Calif., company—including co-founder, director, former chief executive and large shareholder. Some investors questioned whether Mr. Yang had conflicts of interest as Yahoo in recent months explored its strategic options, including whether to sell all or part of the company.
Yahoo analysts and company insiders say that Mr. Yang’s departure has cleared the way for the sale of its assets abroad. The company has been in negotiations with Alibaba and Softbank — a potential acquirer of Yahoo’s share in Yahoo Japan — on a proposed sale of its stakes valued at approximately $17 billion. “Arguably Jerry Yang is the person best known and associated with Yahoo,” says Scott Kessler, an analyst at Standard and Poor’s. “It is fair to say that, whether in terms of reality or perception, he has detracted from the company’s ability to realize shareholder value.”


Mr. Yang played a heavy hand in discussions about Yahoo’s future, according to people close to the matter, who spoke on the condition of anonymity because the talks were private. At times, Mr. Yang’s opinions seemed to diverge from the board’s consensus, these people said, creating a tense — and occasionally confusing — backdrop for negotiations.


Mr. Yang, along with other board members, also faced mounting pressure from activist investors, like Daniel Loeb of Third Point, who has called for the dismissal of both Mr. Yang and Mr. Bostock. Two other people close to board, who requested anonymity in order to maintain business relationships, said that the board was discussing the addition of new directors and several current board members are expected to depart. Yahoo refused to comment.


Shares of Yahoo gained more than 3 percent in after-hours trading after the announcement Tuesday.