Some want Yahoo's new CEO to woo Microsoft

Leaving soon Yahoo's stock rose Tuesday when CEO Jerry Yang said he'd step down but fell yesterday as Microsoft said it doesn't want a deal.

DALLAS - Yahoo Inc. investors say the search to replace chief executive Jerry Yang should focus on a turnaround specialist from outside the Internet company who could draw Microsoft Corp. back into takeover talks.

Yahoo this week disclosed plans to replace Yang, fueling speculation the board will seek to woo Microsoft back. Hiring an insider, such as president Susan Decker, may signal Yahoo is planning more of the same, limiting the likelihood of new talks, said Darren Bagwell, director of equity research at Thrivent Asset Management Inc.

"Who's kidding who? We all know what the endgame is," said Bagwell, whose Appleton, Wis., firm had about $73 billion in assets under management, including Yahoo shares, as of September. "The board finally recognizes that there's frustration and change is required."

Possible candidates include former Yahoo executives Ellen Siminoff and Dan Rosensweig, he said.

Whoever takes the job will be charged with rejuvenating a stock that has plunged by more than half since Yang took over and shoring up Internet advertising sales that are increasingly falling behind those of Google Inc.

UBS AG analyst Ben Schachter identified News Corp. president Peter Chernin and former eBay Inc. chief Meg Whitman as potential choices. Either may balk at joining a company that's being prepared for a sale, Bagwell said.

Yahoo, of Sunnyvale, Calif., dropped $2.41 to $9.14 after Microsoft's chief executive, Steve Ballmer, reiterated that the company isn't interested in buying Yahoo. The 21 percent decline took the shares to their lowest point in more than five years.

The stock rose 8.7 percent Tuesday after Yang said he would step down once a successor is found.

The company confirmed Tuesday that Decker is a candidate. Yahoo has hired Heidrick & Struggles International Inc. to help find a new leader.

Microsoft backed away from a $47.5 billion takeover bid for Yahoo this year.

Yahoo's profit has declined in 10 of the past 11 quarters.