Yang started Yahoo in 1995 with David Filo, developing the site as an Internet guide based on work the two created as students at Stanford in 1994. Yang had served on Yahoo's board of directors since its founding, and acted as the company's chief executive from 2007 through 2009, when he was replaced by Carol Bartz.
In an official statement, Yang said his time at Yahoo "encompassed some of the most exciting and rewarding experiences of my life."
He added, "As I leave the company I co-founded nearly 17 years ago, I am enthusiastic about the appointment of Scott Thompson as Chief Executive Officer and his ability, along with the entire Yahoo! leadership team, to guide Yahoo! into an exciting and successful future.”
Thompson formerly helped PayPal to dramatically expand its operations; he was named Yahoo's chief executive earlier this month after the company dramatically fired Bartz as CEO over the phone last September.
Yahoo's Internet directory service rapidly lost ground to Google search, and the company has been unable to win back share even after buying Overture, which owned the business model Google used to achieve its success in selling paid search placement.
More recently, Yahoo has been beaten in advertising by Facebook. In 2008, Microsoft attempted to buy the company for $44.24 billion, an unsolicited bid the board rejected, claiming that it substantially undervalued the company and was not in the interest of its shareholders. Today, Yahoo's entire market capitalization is $19.14 billion.