Investors late Monday cheered news that Yahoo has pulled the trigger on plans for a replacement of CEO Jerry Yang.

"Over the past year and a half, despite extraordinary challenges and distractions, Jerry Yang has led the repositioning of Yahoo on an open platform model as well as the improved alignment of costs and revenues," Chairman Roy Bostock said in a statement.

Yahoo on Monday said it has begun looking for a new chief executive at the beleaguered search pioneer but that Mr. Yang would remain until that time.

Shares of Yahoo jumped $0.47, or 4.4 percent, to $11.10 in after-hours trading.  In regular session trading Yahoo shares had declined $0.19, or 1.8 percent, to $10.63.

Yahoo's stock has lost nearly two-thirds of its value since the company's 52-week high of $30.25 in February as the company has failed to get bought by Microsoft. 

Mr. Yang plans to return to his former position of Chief Yahoo and serve as a member of the board of directors.

Yahoo has hired executive search firm Heidrick & Struggles to help find the company’s replacement.