With Yang out as Yahoo CEO, Steve Ballmer licks chops

Jerry Yang is no longer CEO of Yahoo. After a short and stormy tenure as CEO Yang is back to being Chief Yahoo.

Jerry Yang is no longer CEO of Yahoo. After a short and stormy tenure as CEO Yang is back to being Chief Yahoo. Steve Ballmer, Microsoft and a search deal--if not outright acquisition--may not be too far behind.

The official line from Yahoo (Techmeme):

Yahoo today announced that its Board of Directors has initiated a search for a new Chief Executive Officer. Jerry Yang, co-Founder of Yahoo!, has decided to return to his former role as Chief Yahoo! upon the appointment of his successor as CEO, and he will also continue to serve on the Board. Yang, 40, assumed the CEO role at the Board's request in June 2007, and he has led Yahoo! throu

gh a strategic repositioning and transformation of its platform.

The reality is Yahoo shares closed Monday at $10.63 when Yang could have sealed a buyout more than $21 ago. Yang's failure--or stubbornness to seal some sort of deal left shareholder in a lurch. No amount of revisionist history was going to change that fact.

Also see: Jerry Yang to step down as CEO, back to Chief Yahoo

The time is now for a Microsoft-Yahoo search deal

One thing is clear: Yahoo did reposition the company. It's just that Wall Street didn't like Yahoo's plan all that much. The next Yahoo transformation is likely to be as a subsidiary or partner of Microsoft. There's a decent chance that Yahoo may not even get around to naming a new CEO if there's a sale in the works.

The odds still favor a search deal with Microsoft. After all, a search deal just makes sense. Microsoft gets its search market share and Yahoo can focus on what it does best--be a great media property.

That reality wasn't going to happen with Yang at the helm. Yang was like the major league closer that blew one too many saves. At some point, a head needs to roll.

Microsoft Steve Ballmer, who still waffles like an Eggo about whether a Yahoo deal makes sense, is likely licking his chops right now. A new CEO isn't going to come in with this "Yahoo must stay independent" mantra. The new CEO is going to have a simple mission. Deliver value. And that means a sale or partnership with Microsoft. Here's what a search deal would look like:

For some, Yang's departure--and an eventual link with Microsoft--is going to be worrisome. However, I'd look for the bright side. A deal with Microsoft will allow Yahoo to focus on being what it really is--a media company. For all the talk about how Yahoo has lost its mojo, no site aggregates eyeballs better. Yahoo is a vital service to millions, including a lot of folks that don't care what search engine it uses.


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