Yahoo shares rally after CEO resigns

Yahoo Inc shares rallied by as much as 16 percent after the company announced that Jerry Yang will step down as chief executive on hopes his departure will clear the way for a deal with Microsoft.
Yang — who will return to his former role as Chief Yahoo, focusing on strategy and technology — tried to carve an independent strategy for Yahoo and was blamed when Microsoft Corp walked away from an offer to buy the company earlier this year.
Rival Google Inc abandoned a search advertising partnership amid regulatory concerns, and Yang faced a growing chorus of criticism from investors and analysts as Yahoo's shares nosedived.
Yahoo's months-long talks with Time Warner Inc about combining with its AOL unit — as yet another way to boost Yahoo's earnings — have also failed to produce a deal.
"The company is in desperate need of change and this is clearly one way to do it," said Ross Sandler, an analyst at RBC Capital Markets, adding that Microsoft could enter the picture again. "Jerry was the roadblock for the last deal getting done."
Yang has consistently said that he would sell the company for the right price.
Microsoft declined to comment.
Yahoo shares last at $10.63 are down nearly 65 percent from their 52-week high of $30.25, reached in February, two weeks after Microsoft made its $31-a-share offer public. Microsoft withdrew its $47.5 bln buyout offer in May after Yahoo rejected the sweetened bid.
Yang, a co-founder of Yahoo, took on the CEO role in June 2007, hoping to strengthen its position as an online consumer brand.
Last month, Yahoo announced it planned to cut at least a tenth of its workforce, or about 1,500 jobs, as corporate brand advertisers scaled back spending on Web marketing promotions amid a global economic downturn.