Jerry Yang is to step down from his role as CEO of Yahoo! The news comes after months of criticism of his handling of the failed Microsoft hostile takeover, and just hours after Google pulled out of an online advertising deal with the company. 
He will remain with the company as Chief Yahoo! and will also remain on the Board. Yahoo! Chairman Roy Bostock, working with the independent directors and in consultation with Yang, is leading the process of assessing potential candidates and determining finalists for consideration. The search will encompass both internal and external candidates, and the Board has retained international executive search firm Heidrick & Struggles to assist in the process.
In a statement issued by Yahoo!, Bostock said:
Over the past year and a half, despite extraordinary challenges and distractions, Jerry Yang has led the repositioning of Yahoo! on an open platform model as well as the improved alignment of costs and revenues. 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. We are deeply grateful to Jerry for his many contributions as CEO over the past 18 months, and we are pleased that he plans to stay actively involved at Yahoo! as a key executive and member of the Board.
Yang himself said:
From founding this company to guiding its growth into a trusted global brand that is indispensable to millions of people, I have always sought to do what is best for our franchise. When the Board asked me to become CEO and lead the transformation of the company, I did so because it was important to re-envision the business for a different era to drive more effective growth. Having set Yahoo! on a new, more open path, the time is right for me to transition the CEO role and our global talent to a new leader. I will continue to focus on global strategy and to do everything I can to help Yahoo! realize its full potential and enhance its leading culture of technology and product excellence and innovation.
Earlier this month, Yang told delegates at a Web 2.0 conference in San Francisco that he thought Microsoft should buy Yahoo! at the right price, whatever that price is.
Last night, Yahoos shares closed at $10.63, valuing the company at $14.7 billion.