A high profile resignation. Jerry Yang, who co-founded Yahoo in 1995, stepped down from the struggling Internet company on Tuesday. He is leaving the company's board of directors, as well as all other positions within the company effective Tuesday. The surprise departure comes just two weeks after Yahoo hired former PayPal executive Scott Thompson as its CEO.

Jerry Yang, Yahoo CEO and co-founder, speaks at a keynote address at the Consumer Electronics Show (CES) in Las Vegas, Nevada in this January 7, 2008. [File photo]

The 43-year-old had been on Yahoo's board since the company's inception. He is also stepping down from the boards of China's Alibaba Group and Yahoo Japan.

Yahoo is negotiating to sell its stakes in both of the Asian companies as part of its efforts to placate investors.

Although a popular figure among Yahoo employees, Yang had alienated the company's shareholders by turning down a chance to sell Yahoo in its entirety to Microsoft for 47.5 billion US dollars, or 33 dollars per share, in May 2008.

Yahoo shares haven't topped 20 dollars for more than three years. On the news, Yahoo shares gained three percent in after-hours trade.