Jerry Yang gave a brave but unconvincing defence of his record as Yahoo! chief executive at the influential Web 2.0 Summit conference in San Francisco this month. He said that he had done his best and believed that he was the right man to take the embattled internet company forward. His departure had already been under active discussion by the board for weeks.

He failed then - as he has with investors and customers during his 16-month tenure as chief executive - to convey a cohesive vision for a company suffering from a disastrous plunge in its share price and increasingly low staff morale. Microsoft executives held him personally to blame for the debacle over the failed takeover bid. They were angry, in particular, that Mr Yang had turned to Google for a lucrative search advertising partnership when Microsoft was trying to buy Yahoo!'s search business.

Now that he will return to his corporate strategy role, who will take his place? Analysts and investors hope that it will be someone who can do a deal with Microsoft, probably for Yahoo!'s search business, which Steve Ballmer, Microsoft chief executive, needs to take on Google.

The most obvious internal candidate is Sue Decker, Yahoo!'s president. She has been at the company for eight years and was in the running to become chief executive last year. Other leading candidates include: Jonathan Miller, the former head of AOL; John Chapple, the former chief executive of Nextel, who became one of the two board members recently picked by Carl Icahn; Dan Rosensweig, the former Yahoo! chief operating officer, a favourite among the company's employees; and Peter Chernin, Rupert Murdoch's second-in-command at News Corporation, owner of The Times, who is an early front-runner, according to speculation, thanks to his formidable reputation and extensive operating experience.

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