Yahoo CEO Jerry Yang announced Monday that he is stepping down after a turbulent year and a half of running the Internet giant.
Yang, 40, told employees in a memo that he will continue as CEO until a replacement is found, then will go back to his old job as " Chief Yahoo." He will remain on the board.
Yang, who briefly served as CEO early in the company's history, returned to that job in June 2007 when Terry Semel resigned.
Analysts said Yang's resignation was due to growing anger among Yahoo investors who say Yang made a serious mistake by rejecting Microsoft's bid for 33 U.S.dollars a share to buy out Yahoo.
Yahoo's stock has slid in value since the rejection. It closed Monday at 10.63 dollars per share.
In addition, the company reported three quarters of declining sales and announced a 10-percent staff cut, of 1,500 employees, in October.
There was immediate speculation as to whether Yang's departure signals the possibility that a Microsoft deal may be revived. But Microsoft chairman, Steve Balmer, has said he is not interested in buying all of Yahoo.
Microsoft declined to comment on Monday's development.
Yahoo, which became an Internet powerhouse almost overnight after being founded in 1994, was created by David Filo and Yang, who as Stanford graduate students developed a new way of searching the Web.
The business grew rapidly and after a brief stint as CEO, Yang stepped aside to become "Chief Yahoo," an advocate for the company and a source of creative thinking.
In the past few years, however, Yahoo has stumbled and been overshadowed by new rival Google. But in fending off the Microsoft takeover attempt, it tried to forge a new search deal with Google. That deal fell apart earlier this month after the U.S Justice Department said it would file a lawsuit to stop the deal.
"I have always sought to do what is best for our franchise," Yang said in the statement.
"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."
Yang said he would continue to focus on global strategy and do everything he could to help Yahoo! " to realize its full potential and enhance its leading culture of technology and product excellence and innovation".