In the end, Jerry Yang knew that he had to go. Yahoo!, the company that he co-founded and nurtured into a giant of the internet, was floundering badly under his leadership.

Yang has admitted that he is not a natural business executive. His strengths lie in his strategic vision and understanding of technology, not the day-to-day direction of a multi-national public corporation.

Earlier this month while his departure was, it now seems, already under active discussion by the board, Yang gave a brave but unconvincing performance at the Web 2.0 Summit conference in San Francisco.

He failed then, as he has done with investors and customers during his 16-month tenure as CEO, to convey a cohesive vision for a company suffering a disastrous plunge in stock price and increasingly low staff morale.

The real damage had been done six months earlier in his handling of the takeover bid by Microsoft. Yahoo! rejected two bids from Microsoft, which offered $47.5 billion. The company is now worth less than $15 billion. Microsoft executives viewed Yang as the main stumbling block to getting a deal done and shareholders, especially the billionaire activist investor Carl Icahn, were furious at the outcome.

Microsoft also attempted to buy Yahoo!'s search engine for $1 billion but Yang turned to a Google search ad partnership in an attempt to gain some much-needed revenue and placate shareholders. It was estimated that Yahoo! could have made up to $800 million a year from the Google partnership but when US antitrust regulators ruled against the deal, Google pulled out.

Could the Microsoft deal be back on now with Mr Yang stepping to one side? Microsoft CEO Steve Ballmer is still interested in buying Yahoo!'s search business to help bolster its market share against Google. But he will be in no rush - time and Yahoo!'s dismal share price are on his side.

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