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updated 2/7/2012 6:16:07 PM ET 2012-02-07T23:16:07

Yahoo Chairman Roy Bostock and three longtime board members are stepping down, submitting to the demands of many frustrated shareholders who blame them for not fixing the problems dragging down the Internet company's revenue and stock price.

The shake-up announced Tuesday continues a drastic makeover of Yahoo's leadership during the past month as the company negotiates to sell its Asian assets in a complex deal that could help ignite a long-promised turnaround.

After Yahoo hired former PayPal executive Scott Thompson as its CEO a few days into the new year, co-founder Jerry Yang resigned from the board and severed all other ties with the company, which he helped start in 1995.

Now Bostock is departing after four years as chairman. Many shareholders still blame him and Yang for squandering an opportunity to sell Yahoo to Microsoft Corp. in May 2008 for $47.5 billion, or $33 per share. Yahoo's stock hasn't traded above $20 in nearly 3 1/2 years. The shares closed Tuesday at $15.82, up by a penny.

(Msnbc.com is a joint venture of Microsoft and NBC Universal.)

In extended trading after the announcement, the stock fell 4 cents to $15.79.

In a move that will give Thompson an even cleaner slate as he tries to come up with a new strategy, Yahoo board members Vyomesh Joshi, Arthur Kern and Gary Wilson also agreed not to seek re-election at Yahoo's shareholders meeting this June.

Kern, a former radio station owner, has been on Yahoo's board for more than 15 years. Wilson, a former airline executive, has been a director since 2001, and Joshi, a Hewlett-Packard Co. executive, has been a director since 2005.

With the housecleaning, Yahoo will be left with seven directors, all of whom have joined the board since the end of 2009. That list includes the two latest directors appointed Tuesday: Alfred Amoroso, former CEO of TV listings provider Rovi Corp., and Maynard Webb Jr., a former eBay Inc. executive who most recently was CEO of LiveOps Inc., which helps to staff customer call centers.

Yahoo, which is based in Sunnyvale, Calif., said it is conducting a search for additional directors.

Bringing in new directors to work with Thompson will "provide Yahoo with the expertise and perspectives necessary to drive innovation and growth," Bostock wrote in a letter Tuesday announcing his plans.

It could also avoid a potential shareholder mutiny. Hedge fund manager Daniel Loeb, who controls a 5.2 percent stake in Yahoo, had been threatening to nominate an alternate slate of directors if Yahoo didn't overhaul its board. In a blistering letter sent late last year, Loeb told Bostock and Yang that they should step aside. The window for nominating alternate candidates to Yahoo's board was scheduled to open Feb. 24.

Calls to Loeb's office weren't immediately returned Tuesday.

Bostock became so unpopular among shareholders that nearly 40 percent of the votes were cast against his re-election in Yahoo's first annual meeting after Microsoft withdrew its takeover offer.

His decision-making came under criticism as Yahoo sunk deeper into a financial rut that has seen its net revenue decline from the previous year for 13 consecutive quarters while rivals Google Inc. and Facebook were growing rapidly. The slump prompted Bostock to fire Silicon Valley veteran Carol Bartz as CEO five months ago. The bitter parting prompted Bartz to lambaste Bostock and Yahoo's other directors as "doofuses."

"These changes are long overdue," said Ryan Jacob, portfolio manager of Jacob Asset Management, which owns more than 140,000 Yahoo shares. "It had gotten to the point where the board really didn't have any other chance. I think everyone needed a clean break."

© 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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