Associated Press
Yahoo, the struggling Internet company, made another unorthodox choice by picking PayPal chief Scott Thompson as its next CEO.

SAN FRANCISCO — In an end of an era at Yahoo, co-founder Jerry Yang has stepped down from the struggling Internet company's board.

He has also relinquished all other positions with the company and his posts on the boards of Yahoo Japan Corp. and Alibaba Group Holding Ltd., according to a statement from the Sunnyvale, Calif., company.

The stock soared 4 percent on the news in after-hours trading.

"What the market is telling you is that Jerry stepping down removes an obstacle to unlocking some of Yahoo's value," said BGC Partners analyst Colin Gillis.

Yang stepped down as Yahoo undergoes a strategic review, in which the board is deciding whether to jettison its holdings in Yahoo Japan and Alibaba Group or sell a minority stake to private equity investors. Its new Chief Executive Scott Thompson took over two weeks ago. Thompson also joined Yahoo's board.

But Gillis cautioned against a rush of optimism.

"Jerry resigning doesn't improve the fundamentals of the business. The fundamentals are still declining," Gillis said. "There is a lot of work to be done at the company to turn it around."

Yang, one of the Internet's pioneers, has earned the ire of some investors who blamed him for thwarting Microsoft's unsolicited takeover attempt.

In a letter to Yahoo Board Chairman Roy Bostock, Yang wrote: "My time at Yahoo, from its founding to the present, has encompassed some of the most exciting and rewarding experiences of my life. However, the time has come for me to pursue other interests outside of Yahoo. 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."

Yang co-founded Yahoo Inc. in 1995 with David Filo and served on the board since March 1995. He was CEO from June 2007 to January 2009.

In a statement, Bostock said: "With Scott Thompson leading an outstanding team of Yahoos to deliver innovative products and an engaging customer experience, Yahoo's future is bright."