Yahoo's revenue has been falling in recent years even as advertisers have poured more money into the Internet. Much of the money, though, has been going to Google and Facebook's online social network, as Yahoo has fallen further behind in the race to innovate and develop products that attract Web traffic.
Despite its struggles, Yahoo remains profitable and still boasts a worldwide audience of 700 million people.
But visitors aren't sticking around Yahoo's services as much as they once did, depriving the company of more opportunities to sell ads — the main source of its revenue.
It has been a jarring comedown for Yahoo, which emerged as one of the Internet's first stars after Yang and Filo expanded the service beyond its roots as a hand-picked directory of websites.
Yahoo's early success turned it into a Wall Street darling and landed Yang on the covers of leading business magazines. At the height of the dot-com bubble 12 years ago, Yahoo's stock was trading above a split-adjusted $100 amid talk that the company might eventually try to buy a long-established media franchise such as the Walt Disney Co.
But now investors widely regard Yahoo as a misguided company that can't come up with a cohesive plan to define itself for Web surfers and advertisers.
Yang and Bostock have been the focal point for much of the criticism, partly because of their key roles in the Microsoft talks in 2008. After buying a 5.2 percent stake in Yahoo last autumn, hedge fund manager Daniel Loeb demanded that both Bostock and Yang step down from the company's board. If they refused, Loeb indicated he would finance a shareholder rebellion to oust both men from the board.
Loeb's fund, Third Point LLC, didn't immediately return phone calls seeking comment late Tuesday.
Bostock, Yahoo's chairman for the past four years, has given no indication that he plans to step down.