Yahoo (YHOO) co-founder Jerry Yang is stepping down as the company’s CEO after unsuccessful efforts to boost profits.

Yang, 40, will continue to serve on Yahoo’s board of directors and will remain as CEO until a replacement is found.

Yahoo’s market value has dropped about $20 billion since Yang became CEO last year.

First, buyout discussions with Microsoft (MSFT) failed; then an ad partnership with Google (GOOG) fell apart. Negotiations with Time Warner’s (TWX) AOL unit went nowhere.

Earlier this year, Microsoft bid $33 a share for Yahoo, the second-largest US Internet search engine. Yahoo’s stock recently fetched $10.63 a share. Microsoft has said it’s no longer interested in buying Yahoo, but would still consider a search-ad deal. However, some analysts have speculated that if Microsoft now buys Yahoo, it will pay about $15 to $18 a share.

Google backed away from a deal to sell ads next to Yahoo’s search results this month when Federal regulators said they might file a lawsuit to block the partnership on the grounds that it would allow Google to control too much of the market. Google grabs about 60% of the US Internet-search market on its own.

Yang’s efforts to boost Yahoo’s sagging sales and increase profits were undercut by the worldwide economic slowdown because advertisers have reduced spending.

Last month, Yahoo said it planned to cut at least 1,500 jobs.

Yang’s departure may result in another round of talks between Yahoo and previous suitors. Some analysts still look for a deal with Microsoft, but if there’s a buyout, it will be at a much lower price than the first offer.