The troubled reign of Yahoo!’s Terry Semel has come to an end with the announcement that he is stepping down as the company’s CEO.

Semel will be replaced in the hotseat by Jerry Yang, and will remain at Yahoo! as non-executive chairman.

Investors had called for a management shake-up at Yahoo!’s annual shareholders’ meeting last week, and a third of them voted against re-electing one or more directors, which put pressure on the company’s board.

The company’s management in general had also come in for plenty of criticism, most famously around the leaked ‘peanut butter memo’ that claimed it was suffering from a lack of consistent leadership, business focus and a cohesive strategy.

A major reorganisation of the company’s management followed in December last year, but doesn’t seem to have been enough to please the critics.

Some blame Semel for failing to realise the importance of search advertising early enough, and failing to keep up with Google. But the introduction of the new Panama ad platform is said to be improving the company’s ad revenues, although not as quickly as some investors had hoped.

In addition, Yahoo!’s leadership has been criticised for failing to cash in on the boom in social networking and online video.

As new CEO Jerry Yang points out on the Yahoo blog, Semel’s time as CEO was not without its successes:

“Terry helped Yahoo! increase our revenues nearly nine-fold from $717m in 2001 to $6.4bn in 2006; boost our operating income from a loss in 2001 to nearly $1bn last year; and create more than $30bn in shareholder value during his tenure.”