Jerry Yang to step down as Yahoo! CEO: Can a new CEO reinvent the company?

After a short and tumultuous tenure as CEO of the company he co-founded, Jerry Yang and Yahoo!, Inc. (NASDAQ: YHOO) announced this evening that Yang will step down as CEO as soon as a successor is found. Carl Icahn is certainly happy, as are the YHOO investors who saw Yang refuse Microsoft Corp.'s (NASDAQ: MSFT) $33/share buyout offer earlier this year. Yahoo! shares closed today below $11.

It's a forgone conclusion that Yahoo! will immediately begin searching for a new CEO. The internal list probably includes just one person -- Yahoo! President Sue Decker. She has ruled the Yahoo! kingdom alongside Yang for the last 16 months and is easily qualified for the position. She also does not seem to bear the blame for failing to consummate the proposed Microsoft merger almost 10 months ago.

This is a precarious time in Yahoo!'s future -- it needs a CEO that can unwrap Yahoo!'s magic once again and get customers -- and the market -- interested in the company again. Yahoo! still has great products and a great brand, but it has tarnish that needs to be wiped away.

Google, Inc. (NASDAQ: GOOG) has stolen any remaining thunder that Yahoo! may have once had. Now Yahoo is seen as an incredibly popular but stodgy company that just doesn't have the cutting-edge position it used to hold in the internet.

It's hard to see how a new CEO can totally re-invent the company. But anything is better for Yahoo! than where it sits now. Yang can go back to his old position as "chief Yahoo!" and rally the troops -- that is, if any of them are even loyal to him any longer.