Yang's Departure Gives Microsoft New Opening

Investors are hoping Jerry Yang’s departure will lead to renewed talks with Microsoft, BusinessWeek reports. “This is probably the beginning of the end for Yahoo,” said one. “Microsoft will probably come back with an offer.” Microsoft has repeatedly denied interest in reviving a deal, but Yang’s departure “clears the path,” one analyst said. “Yahoo can free up its strategic alternatives.”

Investors have been calling for Yang’s head for some time. Though one source says the move wasn’t precipitated by a particular event, it comes less than two weeks after Google backed out of a search advertising agreement to shore up Yahoo’s finances. “The Google deal was probably the last straw,” said one industry insider. “I don’t know how the board could have avoided it.” (More Yahoo stories.)