Yahoo shares up on news of Yang's replacement

Yahoo's announcement that it is to replace Jerry Yang as chief executive has boosted the internet company's flagging share prices.

Yahoo's announcement that it is to replace Jerry Yang as chief executive has boosted the internet company's flagging share prices.

The news has raised hopes the firm may yet be able to strike a deal with Microsoft and has lifted Yahoo shares by 8.7% by the close yesterday, according to the Financial Times.

Stakeholders believe Microsoft is still interested in the deal and a new chief executive at Yahoo would be able to pursue this option.

At the very least a new CEO could come in with a clean slate to explore Microsoft's subsequent proposal to buy Yahoo's search business.

Yahoo's decision to replace Yang comes less than 18 months after his appointment, but comes after shareholder criticism for his rejection of Microsoft's buyout offer in February.

Microsoft had offered $33 a share for Yahoo, but since then shares have dropped to levels below $11.

Yang will be staying on as a board member at Yahoo, but will be taking a more back seat role.

Yahoo has hired executive search firm Heidrick & Struggles to hunt for Yang's replacement.

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