Yahoo up as analysts see deal with Yang exit

SAN FRANCISCO (MarketWatch) � Shares of Yahoo Inc. rose Wednesday as several Wall Street analysts speculated that co-founder Jerry Yang�s exit signals the eventual sale of parts of or the entire company.

Reuters Jerry Yang is leaving the board of directors of Yahoo, a company he cofounded.

But the move also raised questions about Yahoo�s YHOO �long-term plan, with one analyst arguing that Yang�s departure also suggests that its board is �favoring a turnaround� instead of selling the whole company.

Yahoo�s stock climbed another 3.2% to close at $15.92, a day after Yahoo announced the departure of Yang from the board.

The move came as the Yahoo board is believed to be exploring the possible sale of the beleaguered Internet giant, or at least its ownership stakes in Alibaba Group and Yahoo Japan, which currently represent a large chunk of the company�s market value.

�With Yang gone, it is more likely that Yahoo will sell off the Asian assets or sell itself completely,� Needham analyst Laura Martin said in a note. �Either of these choices are good for public shareholders.�

Jordan Rohan of Stifel Nicolaus echoed a similar sentiment, writing that �we believe this resignation increases the chances of an outright sale of the company, even if it happens in two stages, with the cash-rich split-off of Asian assets first.�

Yang, who also stepped down as board member of Alibaba and Yahoo Japan, has faced intense criticism for Yahoo�s sometimes rocky relationship with Alibaba.

/quotes/zigman/59898/quotes/nls/yhoo YHOO 15.36, 0.00, 0.00%

Last year, Yahoo stunned investors by disclosing that Alibaba had transferred ownership of Alipay, its online payment business to an entity controlled by Alibaba CEO Jack Ma. A deal later signed by the two companies to settle the dispute was deemed by some analysts to be unfair to Yahoo.

In a statement late Tuesday, Alibaba Chief Executive Jack Ma called Yang �a longtime friend with whom I have had a strong personal and professional relationship that has withstood some ups and downs over the past few years.�

Yahoo itself has had many ups and downs as it struggled to keep up with stronger rivals, led by Google Inc. GOOG �But questions remain on the Yahoo board�s game plan.

Evercore Partners analyst Ken Sena wrote that, while Yang�s exit �reduces the amount of obstacles� to a full or partial sale, he downplayed the chances of a near-term deal.

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Shares of Yahoo Inc. rose Wednesday as several Wall Street analysts speculated that co-founder Jerry Yang's exit signals the eventual sale of parts of or the entire company, Benjamin Pimentel reports on digits.

�We surmise his departure [is meant] to offer a �pound of flesh� for the board�s failure to consummate a deal to date more than a �green light� on a prospective deal imminent to occur,� Sena wrote.

And Yang�s departure also offers �more evidence� that the Yahoo directors are �leaning towards turnaround.�

�We see this announcement as supportive of newly appointed CEO, Scott Thompson, in that it will likely lessen the decibel level from agitated investors as Scott takes the reign with the primary mandate of reaccelerating the core business, favoring a turnaround,� Sena added.

Still, it will definitely be a different Yahoo, IDC analyst Crawford Del Prete said, speculating that more changes will likely take place.

�I expect board members to change, and assets to be shed,� he said in an e-mail interview. �In the end, I think Yahoo emerges as a smaller, more focused company.�