Yahoo CEO Jerry Yang listens to a question at the Web 2.0 Summit in San Francisco on Nov. 5. Yahoo said on Monday that Yang will step down as the internet company's CEO as soon as a successor is found. (AP Photo/Paul Sakuma, File)

Yahoo Inc. co-founder Jerry Yang is stepping down as chief executive, ending a rocky reign marked by his refusal to sell the internet company to Microsoft Corp. for $47.5 billion US — more than triple Yahoo's current market value.

The change in command announced Monday won't be completed until Yahoo finds his replacement. The Sunnyvale, Calif.-based company said it is interviewing candidates inside and outside the company in a search led by its chairman, Roy Bostock, and the executive recruitment firm, Heidrick & Struggles.

"Jerry and the board have had an ongoing dialogue about succession timing, and we all agree that now is the right time to make the transition to a new CEO who can take the company to the next level," Bostock said.

Yang, who started Yahoo with Stanford University classmate David Filo in 1994, will revert to "Chief Yahoo," a titular role he filled before replacing former movie studio boss Terry Semel as chief executive in June 2007. He will also remain on Yahoo's board of directors.

"I will continue to focus on global strategy and to do everything I can to help Yahoo realize its full potential and enhance its leading culture of technology and product excellence and innovation," Yang said in a statement.

Although Yang had publicly expressed his desire to remain at the helm, Yahoo's board faced intensifying pressure to cast him aside as the company's shares plunged to its lowest levels since early 2003.

The stock fell 19 cents US Monday to close at $10.63 US — a fraction of Microsoft's last bid of $33 per share in early May.

Microsoft chief executive Steve Ballmer withdrew the offer after Yang sought $37 US per share. The negotiating breakdown triggered a shareholder revolt led by billionaire investor Carl Icahn, who called for Yang's ouster in July before reaching a truce that put him and two allies on Yahoo's 11-member board.

Yang, 40, had been pursuing a strategy that he thought would prove Yahoo was worth more than Microsoft was willing to pay, but the rapidly deteriorating economy made a comeback seem increasingly unlikely. As it is, Yahoo's earnings have been eroding for three years, disillusioning investors amid a management exodus that indicated even Yang's own troops were losing faith in him.