Yahoo!'s Semel Steps Down

Updated from 4:37 p.m. EDT

Following months of speculation and shareholder pressure, Yahoo!(YHOO Quote) CEO Terry Semel is stepping down.

The company announced late Monday that Semel would be replaced in the top job by company cofounder and longtime board member Jerry Yang.

Sue Decker, who was recently moved from chief financial officer to lead the company's advertiser and publisher division, was named president. She will assume leadership of Yahoo!'s business operations, which include the advertiser and publisher group along with the Yahoo! Network, Connected Life and international operations, the company said.

Shares of Yahoo! rose 90 cents, or 3.2%, in recent after-hours trading to $29.02.

In a press release, Semel said: "The Board and I have long talked about the importance of ensuring a smooth succession in Yahoo!'s senior leadership -- and more recently, about the need for a leadership team committed to carrying Yahoo! through its multi-year transformation. As we discussed my future goals and plans, I was clear in telling the Board of my desire to take a step back sooner rather than later. I believe Jerry and Sue, with their superb talents and intense dedication to Yahoo! and its people, are the perfect combination to carry us forward. This is the time for new executive leadership, with different skills and strengths, to step in and drive the company to realize its full potential -- it is the right thing to do, and the right time is now."

Semel's continued tenure had been cast over with doubt as activist shareholders have increasingly called for a change at the top. Yahoo! shares have lost roughly one-third of their value since the start of 2006 as Google(GOOG Quote) continued to leave no doubt which company controls search -- while Yahoo!'s efforts at traditional media have provided mixed results, at best.

Semel will continue as nonexecutive chairman of the board. There is no separation agreement with him, the company said.