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SAN FRANCISCO — Yahoo co-founder Jerry Yang is stepping into disrepute as leader charged with execution, ending a rocky imperial sway marked by his refusal to sell the Internet partnership to Microsoft for $47.5 billion — else than triple Yahoo’session in every one’s mouth market value.

The change in command announced this evening won’t be completed till Yahoo finds his replacement. The Sunnyvale, Calif.-based assembly said it is interviewing candidates inside and outside Yahoo in a test 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 very lately is the right time to make the transition to a new CEO who be possible to take the company to the next adapt,” Bostock said.

Yang, who started Yahoo with Stanford University class-fellow David Filo in 1994, choose revert to “Chief Yahoo,” a titular role he filled before replacing former movie studio boss Terry Semel as CEO in June 2007. He be pleased also sojourn 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 good quality and innovation,” Yang declared in a statement.

Although Yang had publicly expressed his long for to abide at the rule, Yahoo’s board faced intensifying pressure to cast him aside as the company’s shares plunged to their lowest levels since early 2003. The stock closed today at $10.63 — a section of Microsoft’s last bid of $33 a participate in early May.

Microsoft CEO Steve Ballmer huffily withdrew the offer after Yang sought $37 a share. The negotiating failure 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 attached Yahoo’s 11-member board.

Today’s shake-up comes as no surprise, given the challenges facing Yahoo.

“The shareholders were ready to pick up pitchforks and torches,” related technology analyst Rob Enderle, who has been following the company for years. “If Jerry wasn’t a founder, he already would have been gone” months ago.

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

After squandering the opportunity to vend to Microsoft, Yang tried to boost Yahoo’s profit by forging any advertising partnership with Internet search leader Google.

But that backup plan hew down through two weeks ago when Google walked away from the deal to avoid a inclosed area battle with the Justice Department, which had concluded the partnership would wish throttled competition in the online advertising place of traffic.