Yahoo has announced that Jerry Yang will step down as chief executive as soon as the board finds a replacement.

Yang will not leave the internet company, but will go back to his previous role as "Chief Yahoo".

Yang has faced criticism from investors and analysts for not finalising a deal that would see Microsoft buying the struggling company.

Yahoo's shares have risen 4% on the back of Yang's departure with the notion that it might clear the way for a renewed Microsoft offer.

"From founding this company to guiding its growth into a trusted global brand that is indispensable to millions of people, I have always sought to do what is best for our franchise", Yang said in a statement.

Yahoo chairman Roy Bostock is now looking for a replacement, from both internal and external candidates, a process that could take up to 12 weeks.