He also sought to shake up the board and the management, which might have come from "The Gang That Couldn't Shoot Straight." Before Mr. Loeb stepped in, Yahoo had unsuccessfully held talks to sell itself to Microsoft for $45 billion, was struggling to attract talent and had a leadership that was viewed as bumbling. This was a problem, because Yahoo's business model was also in decline.
At the time, Mr. Loeb demanded a shake-up of the board, stating that "we have distilled an all-star team of potential director candidates, who would be indispensable in working with the reconstituted board."
What unfolded was in some ways a typical activist play, with the Yahoo board aiding in its own slide. The board initially resisted Mr. Loeb and, over his protests, hired Scott Thompson as the chief executive. When Mr. Loeb helped unearth the fact that Mr. Thompson had falsified part of his résumé, the game was over.
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In the wake of Mr. Thompson's departure, Mr. Loeb and two other directors designated by him were appointed to the Yahoo board. These were Harry J. Wilson, the chairman and chief executive of the Maeva Group, a turnaround and restructuring firm; and Michael J. Wolf, a consultant and former president and chief operating officer of MTV Networks. Max Levchin, an investor and former vice president for engineering at Google, was also appointed later in consultation with Third Point.
These were good directors, and they were part of needed change at Yahoo. The biggest change took place when Yahoo wooed Marissa Mayer away from Google to be its chief executive, a leadership change that Mr. Loeb took credit for.
Ms. Mayer is only about a year into her tenure, but she has started to reboot the business. The results are still uncertain, but she has certainly brought an enhanced image — while also spending over $1 billion to buy Tumblr as well as make 16 other acquisitions.
But Yahoo by all accounts still has a lot of work to do. As Carlos Kirjner, an analyst at Bernstein Research, said last July, "It is unrealistic to expect a turnaround of such a challenged business in 12 months."
Yet, a year later, Mr. Loeb is ready to get out, and making a nice profit along the way.
(Read more: Dan Loeb Sees a 'Huge Game Change' in Japan)
Mr. Loeb, Mr. Wilson and Mr. Wolf have all announced their resignation from Yahoo's board, a move that was in accord with the settlement that Yahoo had arranged with Mr. Loeb in May 2012. These directors agreed to resign once Third Point's stake fell below 2 percent (which is what happened this week with the share repurchase). Yahoo could have asked for these directors to stay on, but either the company didn't want them or the directors didn't want to stay.
A spokesman for Third Point declined to comment.
These directors are leaving when Yahoo's hard work is still left to be finished. It appears that Mr. Loeb and his cohorts are departing Yahoo midvoyage.
Not only that, but the sale is arguably suspect in terms of its timing. Right now, Yahoo's valuation is floating on two pontoons. The first and biggest driver of Yahoo's share gains over the last few years has been its stake in the Chinese Internet giant Alibaba Group. Yahoo still owns 24 percent of Alibaba, which is planning an I.P.O. that could value it at more than $100 billion. Analysts estimate that up to two-thirds of Yahoo's approximate $30 billion market cap may simply be this stake.
