Yahoo has confirmed that co-founder and CEO Jerry Yang will step down, and the search for a replacement has begun.

Yang will step down as CEO once a replacement is found, and will go back to being "Chief Yahoo," which was his previous job at Yahoo.  He will focus on Yahoo's global strategy and will attempt to try and help Yahoo in its most tumultuous time.

"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," Yahoo board members said in a statement.  "We are deeply grateful to Jerry for his many contributions as CEO over the past 18 months, and we are pleased that he plans to stay actively involved at Yahoo as a key executive and member of the board."

Yang publicly stated he wished to remain in control of Yahoo, but the company's board faced too much pressure to try and replace him because of failed business deals over the past few months.

Yahoo will work with executive search firm Heidrick & Struggles to help look for a new candidate -- the board will consider Yahoo executives and outsiders.

After becoming CEO in June 2007 Yang saw success, but his tenure as CEO will likely be remembered as a failure due to a stifled bid by Microsoft to take over the search engine giant.

After months of publicly trading arguments, Microsoft eventually offered to purchase the company for a reduced price, which was again turned down.  In early September, the company's stock price plummeted to $17.81; a number that some analysts predicted would be the lowest it would reach before Yahoo could turn things around.  Yahoo's shares closed today at $10.63 -- its lowest sharing price in five years.

To add to a growing list of problems, a possible search-ad partnership with Google collapsed earlier in the month after Google chose not to try and fight the Justice Department and its threat of an antitrust lawsuit.  U.S. regulators said they would file a lawsuit because Google would have too much control of the advertising market, which the Mountain View company already dominates.

Yahoo's income has fallen 51 percent due to sagging growth and continued market share loss to Google, which led the Sunnyvale, CA-based company to cut 1,500 more employees.  Company executives said they hope the job reduction will help reduce costs while hopefully not dropping profitability.

Yahoo strongly relies on the advertising market that will likely suffer from the global economic collapse.  Analysts expect online ads to be better off than TV or print ads, but because Yahoo relies heavily on graphical display ads instead of text ads like Google, it is unknown what will happen in the coming months.

"All of you know that I have always, and will always bleed purple.  I will always do what I think is right for this great company," Yang said in an internal memo to employees.