Yahoo CEO Terry CEO Terry Semel, who has deservedly been criticised for his rich pay package and not doing enough to counter the Google juggernaut, has resigned.

Semel will now be non-executive chairman.

Acknowledging widespread dissatisfaction with Yahoo’s recent financial performance, Semel said in his resignation letter:

This is the time for new executive leadership, with different skills and strengths, to step in and drive the company to realize its full potential — it is the right thing to do, and the right time is now.

Yahoo co-founder and board member Jerry Yang has taken the reins as CEO of the Sunnyvale, California Internet company that was once hailed as a pioneer but has now seen its sheen wear off considerably because of several missteps including its inability to mount a strong challenge to Google on the search advertising front.

Developed under Semel’s watch, Yahoo’s much delayed Panama advertising platform has so far failed to gain traction in the search advertising marketplace that Google completely dominates.