Yahoo Shares Surge On Hope Yang Exit Restarts Microsoft TalksYahoo Shares Surge On Hope Yang Exit Restarts Microsoft Talks

Shares of Internet company Yahoo rose more than 18% in overseas trading early Tuesday as investors were hopeful that the departure of CEO Jerry Yang would lead to a resurrection of merger discussions with Microsoft.

Yahoo shares also soared in after-hours trading Monday, rising more than 15% to $12.25 after word of Yang's impending exit hit news wires.

As a Yahoo co-founder, Yang was seen by many observers as too emotionally invested in the company to broker a sale to longtime rival Microsoft. Merger discussions earlier this year between Microsoft and Yahoo at times appeared to degenerate into a contest of wills between Yang and Microsoft CEO Steve Ballmer.

Yahoo has retained executive search firm Heidrick & Struggles to find a successor to Yang. Some big names in the tech industry, including former eBay CEO Meg Whitman and former AOL chief Jonathan Miller, have already been floated as possible candidates.

Investors might want to temper their optimism, however. Earlier this month, Ballmer said his company is no longer interested in acquiring the Internet portal.

"We made an offer, we made another offer, and it was clear that Yahoo didn't want to sell the business to us and we moved on," said Ballmer, according to the Associated Press. "We are not interested in going back and relooking at an acquisition," Ballmer said.

Ballmer made the comments Nov. 7 at a business lunch in Sydney, Australia.

The news disappointed investors, many of whom thought Microsoft might renew its campaign to acquire Yahoo after Yahoo and Google said they would dissolve their search advertising partnership.

At one point earlier this year, Microsoft offered to acquire Yahoo for $33 a share -- a bid that was rejected by Yahoo's board. The rejection sparked an effort, led by corporate raider Carl Icahn, to overthrow the board and Yang.

Ballmer said he hasn't ruled out working with Yahoo altogether. "I'm sure there are still some opportunities for some kind of partnership in search, but I think an acquisition is a thing of the past," Ballmer said, according to the AP.