Yahoo Could Thrive — or Be Swallowed by Microsoft

It comes as little surprise to analysts who have been watching the Yahoo drama unfold over the past six months. CEO Jerry Yang, 40, is stepping down and the company is hunting for a new chief who can pull the Internet company up by its billion-dollar bootstraps and compete with Google.

Yang, Yahoo's cofounder, will return to his former role as chief yahoo and continue to serve on the board. Right now, he seems to be a scapegoat for Yahoo's woes -- but are those really his fault, or was Yang set up from the start?

An Adamant Yang

"It wasn't that long ago that Jerry Yang was adamant that he was exactly what the company needed to drive Yahoo through turbulent times. But he was also adamant against the merger with Microsoft that would have brought in millions of dollars to shareholders," said Michael Gartenberg, vice president of mobile strategy for Jupitermedia. "When that didn't materialize, in no small part to your influence, it's a problem."

That wasn't Yang's only problem. Yahoo's search-advertising deal with Google that went up in flames was perhaps the fatal blow. Despite Yang's quarterly promises that positive results were forthcoming, Gartenberg speculated, eventually the market said "enough." Whether Yang realized it himself, or the board helped him see it, Gartenberg said someone finally decided Yang was not the best person to run the company.

"It was a strange fit to put Yang in as CEO in the first place. He's done some amazing things in his life, but presiding over a multi-billion organization as a chief executive was not something that his background would have suggested that he was going to be capable of," Gartenberg said. "I think history will prove that correct."

Yahoo Defends Yang

Yahoo board Chairman Roy Bostock, however, doesn't see Yang as the scapegoat -- at least...

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