Silicon Valley giant Yahoo! Inc. announced today that Jerry Yang has tendered his resignation, 17 years after co-founding the company. Stock prices of the beleaguered company rose slightly following the announcement.

Yahoo has seen a decline in revenue in recent years, and has been struggling to compete with other online companies for advertising dollars. Yang gained some notoriety among shareholders in 2008 when, while he was serving as CEO, the company rejected a multi-billion dollar deal to sell to Microsoft. Yang stepped down as CEO within months, but remained on the board.

Yang said in a statement:

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!

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Just a few days after its draconian layoffs, Yahoo! is still feeling the pinch of an angry mob that was p-o’d at being dumped.

The result has been a boon for Valleywag.com, which posted some of the more interesting behind-the-scenes stories among the layoffs.

Best item: Jerry Yang, Yahoo! CEO lined his house with Kevlar before he chopped the legs out from 1,500 workers.

Yahoo! in California went through with its quasi-announced layoffs today.

Hundreds of people were shown the door by security guards (1,500 throughout the state; 200 in L.A.), complete with Christmas gifts in their arms and tears in their eyes.

Generally, even though they were being laid off and truly pissed off at Yahoo! management including CEO Jerry Yang, employees were ultra-reluctant to talk to the media.

But a few juicy notations showed up on Twitter. To wit:

Much crying and gasping (as people find out the next person is gone) and many hugs and “good lucks”s about 6 hours ago from web

I got an email which said simply “I need to talk to you about changes to the organization” – for 10:45 am in a conf room about 6 hours ago from web

Many mgrs and jr mgrs gone — top performers, too about 6 hours ago from web

Count now is way over 25 about 6 hours ago from web

My manager got laid off and so did i, just now — and at least two others on my team about 6 hours ago from web

Got off elevator, saw coworker, w/backpack, wlking 2 conf rm w/ mgr. they started promptly. people on floor exchanging xmas gifts about 7 hours ago from web

Not pitiful. Just sad.

Yahoo!, via an email from departing CEO Jerry Yang, told its California employees that on Wednesday, as many as 1,500 employees will be tossed, inside sources confided to FBLA.

No details were available regarding the email, but one employee who read it said Yang talked about the need to make cutbacks. This was in keeping with his statement in mid-November that Yahoo! would have to layoff as much as 10% of its global workforce. He targeted Dec. 10 as D-Day for these employees.

In her technology blog All Things Digital, Kara Swisher said Yang had told her in October that layoffs were a distinct possibility and described them as “consolidation and organizational corrections.”

“We’re asking ourselves — should we sell it or should we shut it down?” Yang said. “That is the kind of comprehensive look we are doing across the company.”

The layoffs, which could ultimately number as high as 2,000, are generally across the board, but human resources will likely take the biggest hit because their expenses are cost-based and most of their costs are staff.

Swisher said employees will be told Wednesday, but FBLA sources saw the email on Monday afternoon. Staff is supposedly allowing for a “normal seperation period,” but that could mean that employees will have to exit within a few hours of being told.

Swisher’s sources said Yahoo executives are not expecting any serious problems like extremely upset employees because the layoffs have been long in coming. Security will be present, however, at its Sunnyvale headquarters and presumably in Los Angeles.

Most employees do not know if they will be let go yet, Swisher maintained, because the cuts have not yet been made public.

Yahoo! is playing it close to the vest because entire projects might be eliminated and the secrecy allows time to restructure further if necessary.

Swisher conjectures that rumors have surfaced of whole divisions being juggled among the bigger managers presumably to stake out territory before a new CEO is installed.

Meanwhile, Yang has not officially left his slot, though he said last month that he was planning on leaving.

Yahoo! CEO Jerry Yang, who has been back and forth on whether he was sticking with the struggling internet giant, chose to surprse everyone and quit on Monday, the New York Times and others wrote.

Yang, who was unclear about Yahoo!’s future last summer at the Herb Allen Sun Valley Media Conference. At the time, Yang told FBLA that is future was uncertain, but that for the short term he wasn’t going anywhere.

In a memo sent to the company’s staff on Monday evening, Yang said he would retain the post until the board names his successor. After that, he said he’d return to his previous job as “chief Yahoo” – a corporate strategy role – and remain on the board.

Yang’s move comes 18 months after he assumed the CEO post after the departure of Terry Semel. His tenure has been dogged by a precipitously declining stock price and the collapse of a $44 billion takeover offer from Microsoft.

In the memo, Yang wrote, “I strongly believe that having transformed our platform and better aligned costs and revenues, we have a unique window for the right ceo to take ownership over the next wave of mission-critical decisions facing the company.”

Dan Cox, on special assignment for FishbowlLA, covering the 2008 Sun Valley Media Conference.

As Herb Allen‘s Sun Valley retreat started to wind down Friday afternoon, some key executives were already boarding their Lear Jets and scooting home, missing out on speeches from the two RICHEST men in the world. They will all miss former Microsoft chair Bill Gates and Berkshire Hathaway’s Warren Buffett tomorrow. Mediabistro will stick around in Sun Valley in beautiful weather (82 degrees and sunny) to gather up whatever crumbs can be taken from the rich men talks.

A presentation by Jordan’s King Abdullah II was well received by a few hundred conference-goers, but nobody wanted to talk about what the Jordanian said. Maybe they were concerned about their oil stocks. Security wasn’t especially heavy for the King, but the feeling on Herb Allen campus was that if any disruptions were started, the crack NYPD-filled security staff would take them down.

Yahoo! CEO Jerry Yang showed up in Sun Valley just in time to get an earful of complaining in the media about the earthworm status of the Yahoo!/Microsoft merger talks. He did meet quietly with the Google boys, co-founders Sergey Brin and Larry Page as well as CEO Eric Schmidt, but that was presumably made to discuss the display advertising deal that the two companies cut a few weeks back.

Meanwhile, Yahoo! President Sue Decker practically threw her arms up and gave in to media queries about what’s going to happen.

“Forget tomorrow, but in six months where will you be and where will Yahoo! be?” asked one intrepid journo.

“I have no idea,” Decker moaned.

Dan Cox, on special assignment for FishbowlLA, covering the 2008 Sun Valley Media Conference.

Google co-founders Larry Page and Sergey Brin and CEO Eric Schmidt stunned the hardened journalist crowd at the Sun Valley Media Conference with an unscheduled 75-minute press conference at which they discussed everything — Google, Microsoft, Yahoo! — and their brethren.

A news conference is unusual for the Sun Valley confab because they don’t often cater to journalists and especially not through lengthy pressers.

So what started as a short sit-down with Schmidt turned into a fascinating ride into the minds of the Google executives. And it may be the only time this week, the journos will be faced with deadlines and a hefty pile of interview info to sift through.

The Google trio were relaxed and somewhat light-hearted about the discussion, but they’re ultra-serious about how they handle business.

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Dan Cox, on special assignment for FishbowlLA, covering the 2008 Sun Valley Media Conference.

In the Sun Valley Lodge bar last night, where all the good deals are made, an informal pow-wow of sorts for Yahoo! executives and their new partners Google Inc. was underway with Google co-founder Larry Page, Yahoo! President Sue Decker and even former Yahoo! co-chair Terry Semel all having a drink. Semel would later tell a couple of inquiring reporters that the conversation at the table was inspiring.

Elsewhere in the bar, former Miramax founder Harvey Weinstein ambled in, but refused to say anything to reporters. “I’m not talking to anyone up here,” he said before joining Wendi Deng‘s table.

Amazon’s Jeff Bezos, Gamco Investors Mario Gabelli, NBA commissioner David Stern, ICM’s Chris Silbermann and Page 1 Media’s Isaac Lee were spotted.

Earlier Google. co-founder Sergey Brin lauded the search engine deal they have with Yahoo, saying Yahoo was a “good company with good people,” but he deferred all other questions to Yahoo! chairman Jerry Yang, who is due into Sun Valley today.

Brin was also approached by Sony Corp.’s Katsumi Ihara who wanted to discuss TVs, but Ihara was thrown for a loop when he was told the screen Brin usually used was a Toshiba.

Also, the mystery continues. Just who is Ken Starr? The journos in Sun Valley were all convinced it was the former prosecutor who had a Jones about Bill Clinton. When confronted, this Starr denied any connection to that Starr, who is currently Dean of Pepperdine Law School. But he refused to disclose who or what Starr & Co. actually does.

We’re fairly certain the New York Post could give a rat’s ass about the troubles in Sunnyvale involving Yahoo’s CEO Jerry Yang and co-founder David Filo. But when copy editors get the chance to write headlines like:

BUNCH OF YAHOOS
INVESTORS MAY YANK YANG, FILO OVER DOUGH

they take it.

Terry Semel, the former Hollywood studio boss, stepped aside at Yahoo!, after 6 years in the executive suite. Co-founder and Chief Yahoo Jerry Yang became CEO (here’s his My New Job memo) , with Sue Drecker as president. Semel will remain as nonexecutive chairman. Yang is seen by some as a placeholder.

Why?
Yahoo lost ad dollars to Google and share price dropped under Semel’s watch. Shareholders got cranky during the annual meeting earlier this month.

Semel also didn’t acquire DoubleClick, Feedburner, MySpace, Facebook or YouTube, and the original content never materialized.

The entertainment was a bust. Employee morale was low.

Semel’s pay package has been decried, as has the company’s cooperation with the Chinese internet police.