Yahoo! cofounder Jerry Yang has reached a "mutual" agreement with the company to step down as CEO as soon as a replacement can be found. The arguably overdue move comes as the struggling Internet company continues to lose value and one-time suitor Microsoft has moved ahead with its own Yahoo-less Internet strategy.

"I have always sought to do what is best for our franchise," Yang wrote in a letter to Yahoo! employees last night, using his characteristic, if childish, all lower case letter writing style. (Which I won't reproduce here, sorry.) "Once a successor is named, I will return to my previous role as Chief Yahoo and continue to serve as a director on the board."

"Chief Yahoo," of course, is a ceremonial title: Yang won't have any operational and managerial role once his successor is named.

Yang co-founded Yahoo! with David Filo in 1994 and the company, inexplicably, became an Internet powerhouse during the Dot Com boom. While it is still the second most visited Web site in the US, Yahoo! has fallen on tough times lately, largely because it has been unable to capitalize on the Web search advertising market dominated by Google.

Yang spearheaded an effort to scuttle Microsoft's takeover bid for the company earlier this year, arguing that his company was worth far more than the $44.6 billion that Microsoft offered. (That price represented a 62 percent premium over Yahoo!'s value at the time.) Yahoo!, however, is worth less than one-third of that now, and the company's board finally decided it was time to move on.

Microsoft, for its part, says that it is no longer interested in purchasing all of Yahoo!. But an offer for part of the company--like its search business--or perhaps a partnership is not out of the question. Yahoo! is also looking into merger possibilities with Time Warner's AOL unit.