Wall Street is giddy over the resignation of Yahoo CEO Terry S. Semel.
The head of the Internet giant stepped down late Monday afternoon, just days after shareholders disappointed with the company's slumped stock price called for his ouster at the company's annual meeting.
He will be replaced by Yahoo co-founder and board member Jerry Yang.
Investors took the change as a sign of good things to come at Yahoo, which has struggled in recent months to compete with Google in the fight for online advertising dollars.
"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 said in a statement as he stepped down.
Monday, the board also named Susan Decker, the executive vice president in charge of the advertiser and publisher group, as president of the company.
Semel made more than $39.8 million as CEO last year, according to the company's proxy statement. In the statement, Yahoo said that because Semel had resigned as CEO and would continue on as nonexecutive chairman, there would be no separation agreement.
Wall Street seems to like it when founders return to rescue their companies.
The return of Steve Jobs to Apple has been nothing short of a boom there.
The company and Jobs are seen to many as being one. Fans of Apple say he is the inspiration and driving creative force there.
Investors seem to think that Yang can bring that same kind of spark to Yahoo.
Under Semel's leadership in the last six years, the price of Yahoo's stock increased more than 170 percent.
However since January 2006, the stock price has plummeted more than 30 percent.
Semel's resignation has helped the stock bounce back. In after-hours and European trading, Yahoo's value climbed about 6 percent.
"When you get one of the founders coming back in there, they seem to have the innate ability to sniff out problems and see where they need people replaced and put the ship back on course," Steve Previs, senior vice president at Jefferies International, told The Associated Press. "It's good news and I think the investing community picked up on that."
Semel, 64, was appointed CEO and chairman of the board on May 1, 2001. Before joining Yahoo, he was best known for his stint as CEO of Warner Bros. and the Warner Music Group.
The biggest problem for Yahoo has been Google, the Internet search and advertising giant whose named has now also become a verb.
Google has toppled Yahoo's dominance in a short time frame. Yahoo led the Web in August 2004, when Google went public, but that is no longer the case.
Google now takes in more money in a single quarter than Yahoo does in an entire year. Its stock is now worth six times its initial public offering price. Yahoo has been stagnant, with its share price slightly lower than it was when Google went public.
Google has added a bevy of products to its original search engine.
The Mountain View, Calif. company now offers everything from e-mail to mapping and satellite programs to online spreadsheet and word processing applications. It has also acquired popular online companies such as YouTube.
Yahoo on the other hand has stuck with its groups, e-mail and original search products.
Yang still owns a 5 percent stake — worth an estimated $1.5 billion — in Yahoo.
Yang developed Yahoo in 1994 with David Filo, while the pair were doctoral candidates in electrical engineering at Stanford University.