Yahoo, Inc. (NASDAQ:YHOO) has announced the resignation of Jerry Yang from its board of directors and all other positions he held at Yahoo. Additionally, Yang also resigned from the boards of Yahoo Japan and Alibaba Group.

The move was largely unexpected, especially as Jerry was viewed as spearheading the campaign for Yahoo to continue to operate as a stand-alone entity, yet after 17 years since founding the company, the move was abrupt and surprising - opening up a few scenarios.

The resignation of Jerry Yang from not only the Yahoo board, but also Yahoo Japan and Alibaba, raises a few scenarios, but we believe the path for a potential transaction has increased slightly, Susquehanna Financial analyst Herman Leung wrote in a note to clients.

Yang, who co-founded Yahoo along with David Filo, might not be gone for long. After all, his resignation could potentially mean more flexibility as an independent unrelated party. His involvement might have been a deterring factor for some investors or strategic partners and potentially be a condition for a pending transaction.

One has to ponder why Yang resigned from all three boards, and it is tough not to wonder if Yang would/could partner up with private equity firms to launch a bid to buy out the entire Yahoo. Yang still owns 46.6 million shares, or 3.8 percent of the company's outstanding stock, according to a regulatory filing in late November. 

We have always thought Yang fought hard to keep Yahoo and that option could now be a reality now that he has cut off affiliation with the company, said Leung, who has a neutral rating on Yahoo shares.

Yahoo has been facing mounting challenges as it lost its search engine market share to Google, Inc. (NASDAQ:GOOG), which tops  search share has been steady at 65 percent, while Yahoo's share has been about 15 percent. comScore said Google sites accounted for 66.1 percent of total core search queries conducted in December, followed by Yahoo sites with 16.2 percent and Microsoft sites with 13.8 percent.

Yahoo's U.S. display ad impressions fell to 10.2 percent in June, and time spent by users on its site increased just 1.6 percent for the 12 months ended July 2011, according to comScore. On the other hand, Facebook's ad impressions rose to 32.4 percent in June 2011 and time spent by users on its site jumped 58 percent.

Amid the stiff competition from Google and Facebook and as part of turnaround strategy, the company laid off hundreds of workers, closed or sold several of its less popular services. Yahoo has also been selling stakes to raise billions of dollars, with which it could use to buy a good startup to boost its results.

In September, Yahoo fired Carol Bartz and recently named PayPal executive Scott Thompson as her successor. Even Thompson's appointment was also questioned due to his lack of experience in media and content.

In 2008, Microsoft offered $33 per share, or $47.5 billion, to acquire Yahoo, but Yang rejected it disappointing many shareholders.  Shares of Yahoo closed Tuesday's regular trading at $15.43 on Nasdaq.

Meanwhile, Yahoo is expected to report is fourth-quarter numbers Jan 24. Wall Street expects Yahoo will report earnings of 24 cents a share on revenue of $1.19 billion, according to analysts polled by Thomson Reuters.