SAN FRANCISCO (AP) -- Yahoo Inc. founder Jerry Yang has never concealed how much he cares about his Internet company.

His emotional attachment is one of the reasons he balked at a $47.5 billion takeover offer from Microsoft Corp. six months ago. The same devotion finally led Yang to conclude he should step aside as chief executive, as the company seeks to bolster its depressed stock price and sagging earnings in an economic downturn that might prove even more wrenching than the dot-com bust of eight years ago.


Yang's surrendering of the CEO reins, announced Monday, won't occur until Yahoo finds a suitable replacement. The Sunnyvale-based company said it is interviewing candidates inside and outside Yahoo in a search led by its chairman, Roy Bostock, and the executive recruitment firm Heidrick & Struggles.

It didn't take long for analysts to conclude Yang's departure will clear the way for a major overhaul that could culminate in Yahoo's sale to Microsoft -- something Yang refused to do in May, to the great irritation of shareholders.

"We still believe Microsoft will eventually own Yahoo," UBS analyst Benjamin Schachter wrote in a research note late Monday. "Jerry moving out of the CEO role may accelerate this."

Microsoft declined to comment Monday.

Although Yang had publicly expressed his desire to remain at the helm, Yahoo's board faced intensifying pressure to cast him aside as the company's shares plunged to their lowest levels since early 2003. The stock fell 19 cents Monday to close at $10.63 -- a fraction of Microsoft's last bid of $33 per share in early May.

Microsoft CEO Steve Ballmer huffily withdrew the offer after Yang sought $37 per share. The negotiating breakdown triggered a shareholder revolt led by billionaire investor Carl Icahn, who called for Yang's ouster in July.

Icahn reached a truce that put him and two allies on Yahoo's 11-member board, but he still has been lobbying for Yahoo to pursue a deal with Microsoft that would either involve selling the company in its entirety or just its search engine, which ranks a distant second to Google Inc. An Icahn spokeswoman said the financier had no comment Monday.

Monday's shake-up comes as no surprise, given the challenges facing Yahoo.

"The shareholders were ready to pick up pitchforks and torches," said technology analyst Rob Enderle. "If Jerry wasn't a founder, he already would have been gone" months ago.

Bostock made it sound as if the change in command had been in the works for some time. "Jerry and the board have had an ongoing dialogue about succession timing, and we all agree that now is the right time to make the transition to a new CEO who can take the company to the next level," he said.

Yang, who started working on Yahoo with Stanford University classmate David Filo in 1994, will revert to "Chief Yahoo," a titular role he filled before replacing former movie studio boss Terry Semel as CEO in June 2007. He will also remain on Yahoo's board of directors.

"All of you know that I have always, and will always bleed purple," Yang wrote Monday memo to employees, referring to the company's official color.

Sue Decker, Yahoo's president, is expected to be among the candidates to succeed Yang, although she has been an integral part of the management team that has exasperated the company's shareholders.

Dan Rosensweig, who resigned as Yahoo's chief operating officer, also could be lured back as CEO, or the board could turn to one of its own directors, such as former Viacom Inc. CEO Frank Biondi or former Nextel CEO John Chapple.

Investors appeared to be pleased with the decision to replace Yang, as Yahoo shares climbed more than 4 percent in Monday's extended trading.

Yang, 40, had been pursuing a strategy that he thought would prove Yahoo was worth more than Microsoft was willing to pay, but the rapidly deteriorating economy made a comeback seem increasingly unlikely.

After squandering the opportunity to sell to Microsoft, Yang tried to boost Yahoo's profit by forging an advertising partnership with Google.

But that backup plan fell through two weeks ago when Google walked away from the deal to avoid a court battle with the U.S. Justice Department, which had concluded the partnership would have throttled competition in the online advertising market.

Just a few hours after the Google partnership collapsed, Yang publicly said he thought Microsoft should hook up with Yahoo. But Ballmer threw cold water on the idea the next day by declaring he doubted a deal could be worked out.

Yang had also been exploring a possible acquisition of another fading Internet star, AOL, but most analysts panned the idea as a desperation move that threatened to hurt Yahoo more than it would help.

Although Yang's tenure as CEO is unlikely to be remembered fondly by shareholders, his legacy as an Internet visionary remains secure.

Yahoo's remarkable rise began in 1994 when Yang and Filo began compiling a directory of their favorite Web links while working on their engineering doctorates in a trailer at Stanford University. They initially called their site "Jerry and David's Guide to the World Wide Web," only to later decide to switch to an acronym for "Yet Another Hierarchical Officious Oracle."

Yang and Filo became two of the Internet's first billionaires not long after Yahoo went public in 1996 with fewer than 50 employees on the payroll. At the height of the dot-com boom, Yahoo's market value stood at $130 billion. It was less than $15 billion Monday.

WASHINGTON — Sorry, Mr. President. Please surrender your BlackBerry.

Those are seven words President-elect Barack Obama is dreading but expecting to hear, friends and advisers say, when he takes office in 65 days.

For years, like legions of other professionals, Mr. Obama has been all but addicted to his BlackBerry. The device has rarely been far from his side — on most days, it was fastened to his belt — to provide a singular conduit to the outside world as the bubble around him grew tighter and tighter throughout his campaign.

“How about that?” Mr. Obama replied to a friend’s congratulatory e-mail message on the night of his victory.

But before he arrives at the White House, he will probably be forced to sign off. In addition to concerns about e-mail security, he faces the Presidential Records Act, which puts his correspondence in the official record and ultimately up for public review, and the threat of subpoenas. A decision has not been made on whether he could become the first e-mailing president, but aides said that seemed doubtful.

For all the perquisites and power afforded the president, the chief executive of the United States is essentially deprived by law and by culture of some of the very tools that other chief executives depend on to survive and to thrive. Mr. Obama, however, seems intent on pulling the office at least partly into the 21st century on that score; aides said he hopes to have a laptop computer on his desk in the Oval Office, making him the first American president to do so.

Mr. Obama has not sent a farewell dispatch from the personal e-mail account he uses — he has not changed his address in years — but friends say the frequency of correspondence has diminished. In recent days, though, he has been seen typing his thoughts on transition matters and other items on his BlackBerry, bypassing, at least temporarily, the bureaucracy that is quickly encircling him.

A year ago, when many Democratic contributors and other observers were worried about his prospects against Senator Hillary Rodham Clinton, they reached out to him directly. Mr. Obama had changed his cellphone number, so e-mail remained the most reliable way of communicating directly with him.

“His BlackBerry was constantly crackling with e-mails,” said David Axelrod, the campaign’s chief strategist. “People were generous with their advice — much of it conflicting.”

Mr. Obama is the second president to grapple with the idea of this self-imposed isolation. Three days before his first inauguration, George W. Bush sent a message to 42 friends and relatives that explained his predicament.

“Since I do not want my private conversations looked at by those out to embarrass, the only course of action is not to correspond in cyberspace,” Mr. Bush wrote from his old address, G94B@aol.com. “This saddens me. I have enjoyed conversing with each of you.”

But in the interceding eight years, as BlackBerrys have become ubiquitous — and often less intrusive than a telephone, the volume of e-mail has multiplied and the role of technology has matured. Mr. Obama used e-mail to stay in constant touch with friends from the lonely confines of the road, often sending messages like “Sox!” when the Chicago White Sox won a game. He also relied on e-mail to keep abreast of the rapid whirl of events on a given campaign day.

Mr. Obama’s memorandums and briefing books were seldom printed out and delivered to his house or hotel room, aides said. They were simply sent to his BlackBerry for his review. If a document was too long, he would read and respond from his laptop computer, often putting his editing changes in red type.

His messages to advisers and friends, they say, are generally crisp, properly spelled and free of symbols or emoticons. The time stamps provided a window into how much he was sleeping on a given night, with messages often being sent to staff members at 1 a.m. or as late as 3 a.m. if he was working on an important speech.

He received a scaled-down list of news clippings, with his advisers wanting to keep him from reading blogs and news updates all day long, yet aides said he still seemed to hear about nearly everything in real time. A network of friends — some from college, others from Chicago and various chapters in his life — promised to keep him plugged in.

Not having such a ready line to that network, staff members who spent countless hours with him say, is likely to be a challenge.

“Given how important it is for him to get unfiltered information from as many sources as possible, I can imagine he will miss that freedom,” said Linda Douglass, a senior adviser who traveled with the campaign.

Mr. Obama has, for at least brief moments, been forced offline. As he sat down with a small circle of advisers to prepare for debates with Senator John McCain, one rule was quickly established: No BlackBerrys. Mr. Axelrod ordered everyone to put their devices in the center of a table during work sessions. Mr. Obama, who was known to sneak a peek at his, was no exception.

In the closing stages of the campaign, as exhaustion set in and the workload increased, aides said Mr. Obama spent more time reading than responding to messages. As his team prepares a final judgment on whether he can keep using e-mail, perhaps even in a read-only fashion, several authorities in presidential communication said they believed it was highly unlikely that he would be able to do so.

Diana Owen, who leads the American Studies program at Georgetown University, said presidents were not advised to use e-mail because of security risks and fear that messages could be intercepted.

“They could come up with some bulletproof way of protecting his e-mail and digital correspondence, but anything can be hacked,” said Ms. Owen, who has studied how presidents communicate in the Internet era. “The nature of the president’s job is that others can use e-mail for him.”

She added: “It’s a time burner. It might be easier for him to say, ‘I can’t be on e-mail.’ ”

Should Mr. Obama want to break ground and become the first president to fire off e-mail messages from the West Wing and wherever he travels, he could turn to Al Gore as a model. In the later years of his vice presidency, Democrats said, Mr. Gore used a government e-mail address and a campaign address in his race against Mr. Bush.

The president, though, faces far greater public scrutiny. And even if he does not wear a BlackBerry on his belt or carry a cellphone in his pocket, he almost certainly will not lack from a variety of new communication.

On Saturday, as Mr. Obama broadcast the weekly Democratic radio address, it came with a twist. For the first time, it was also videotaped and will be archived on YouTube.

Sources: NYTimes.com