Yahoo shares soar as Yang agrees to quit CEO post

Shares of Yahoo Inc soared 10 percent on Tuesday on hopes that the departure of Jerry Yang, its embattled chief executive, would clear the way for a deal with Microsoft Corp.

Yahoo announced late on Monday that Yang, whose leadership had come under growing criticism from shareholders after he failed to agree to a deal with Microsoft, would step down from his role as soon as the board finds a replacement.

Yahoo is evaluating both internal and external candidates for the top post, and has hired executive search firm Heidrick & Struggles to run the search process.

Analysts said Yang’s decision to step down is a sign that the board was frustrated with his efforts to turn around the company, which he co-founded. Yang took on the CEO role in June 2007.

“Jerry’s resignation as CEO reflects failed promises he made while fighting off Microsoft’s offers, and the board’s displeasure with his go-it-alone strategy,” wrote Jefferies & Co analyst Youssef Squali in a research note.

Read more on REUTERS by Anupreeta Das and Doris Frankel; Editing by Brian Moss