Yahoo's fate riding on Yang's successor as CEO

The names of possible successors include obvious ones like Yahoo’s current president and Yang confidant, Susan Decker, as well as its former chief operating officer, Dan Rosensweig, who left last year after a management shake-up diminished his authority.

Other candidates offer more intrigue, like former eBay Inc. CEO Meg Whitman or media mogul Rupert Murdoch’s top lieutenant at News Corp., Peter Chernin, who just so happens to be getting ready to negotiate another contract.

Whitman appears to be a long shot because she has indicated she’s more interested in pursuing a political career than returning to the executive suite.

Jonathan Miller, the former CEO of AOL, has been mentioned as another possibility. But when he left AOL in 2006, his severance agreement included a noncompete clause that prevents him from working from rivals like Yahoo until March 2009. Time Warner Inc., AOL’s corporate parent, enforced the provision to block Miller from joining Yahoo’s board last summer.

Gartner Inc. analyst Allen Weiner believes Yahoo should recruit a turnaround specialist or a “young Turk” in the mold of Jason Kilar, who was lured from Amazon.com Inc. last year to run the online video site Hulu.com. If Yahoo takes that kind of a step, Weiner said the deep pools of talent at Silicon Valley neighbors Google and Apple Inc. might yield a savvy new leader.

Other names being bandied about include the former head of Microsoft’s online operation, Kevin Johnson, who helped persuade the software maker to bid for Yahoo. Johnson left Microsoft during the summer to become CEO of computer gear maker Juniper Networks Inc., which is located a half-mile from Yahoo’s headquarters in Sunnyvale, Calif.

Whoever Yahoo selects needs to have charisma and vision if the company is to have any hope of bouncing back, said Todd Dagres, founder of the venture capital firm Spark Capital. “Yahoo is like a wounded animal right now. They need an Obama-like leader,” he said.

Microsoft might make a move on Yahoo before the board even has a chance to hire a new CEO, Jefferies & Co. analyst Youssef Squali suggests. He estimates Microsoft could buy Yahoo in its entirety for $20.50 to $22 per share or perhaps just snap up Yahoo’s search operations for $8 per share.

Microsoft declined to comment Tuesday on its interest in Yahoo.

Yahoo’s most outspoken director, Carl Icahn, has been lobbying for a search deal with Microsoft since he became one of the company’s largest shareholders in May.

Icahn waged a campaign to fire Yang during the summer before reaching a truce that gave him and two allies seats on Yahoo’s board. Those allies, former Viacom Inc. CEO Frank Biondi and former Nextel CEO John Chapple, also could vie for Yang’s job.

Even if Icahn finally gets his wish, a Microsoft deal might not be enough to make him whole. He acquired his 5 percent stake in Yahoo for around $25 a share.

Sanford Bernstein & Co. analyst Jeffrey Lindsay doubts Microsoft will renew its pursuit of Yahoo until early next year. He reasons Microsoft has little to lose by waiting, since Yahoo’s stock is unlikely to rise much higher, and the extra time will give the software maker more time to assess how its own efforts to improve its Internet operations are panning out.

Waiting also would help Microsoft get a better understanding of the antitrust hurdles a Yahoo bid might face under a new presidential administration.

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