NEW YORK (CNN/Money) - Michael Eisner is finally stepping down after 20 years at the helm of Walt Disney Co., marking the end of a long stretch of tumultuous growth at the legendary media company.

Michael Eisner plans to retire as Disney CEO in two years, the company said Friday.

The departure of Eisner -- who sent a letter to the company's board Thursday saying he'll retire when his contract expires on Sept. 30, 2006 -- immediately set off a furious round of speculation about who might succeed him.

The embattled Eisner, 62, told the Los Angeles Times in an interview published last weekend that Disney President Robert Iger was his "preferred choice." Iger, a veteran broadcasting executive, told the newspaper he was interested in the job.

Eisner was stripped of his post as chairman after 43 percent of shareholders voted in May not to return him to the board. But he retained the support of the company's board, despite attacks from two former board members, Stanley Gold and Roy Disney, the nephew of company founder Walt Disney.

Disney (DIS: up $0.34 to $23.20, Research, Estimates) stock rose about 1 percent on the New York Stock Exchange after the announcement.

Analyst Tom Wolzein of Bernstein & Co. said other possible successors include ex-Disney execs at other companies, such as eBay Inc. (EBAY: Research, Estimates) CEO Meg Whitman, Gap Inc. (GPS: Research, Estimates) CEO Paul Pressler, and Comcast Corp. chief operating officer Steve Burke.

Wolzein said other seasoned media heavyweights who could emerge as candidates include News Corp. (NWS: Research, Estimates) President Peter Chernin, Leslie Moonves, the co-chief operating officer of Viacom and the head of its CBS unit, and Jeff Bewkes, chairman of the entertainment and networks group at Time Warner Inc. (TWX: Research, Estimates)

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Other outside candidates could include Tom Freston, the other co-president of Viacom, who is competing with Moonves for the top job there, as well as Yahoo Inc. (YHOO: Research, Estimates) CEO Terry Semel, and even Steve Jobs, CEO of Disney partner Pixar (PIXR: Research, Estimates) as well as Apple Computer (AAPL: Research, Estimates), according to Reuters.

Roy Disney earlier this year urged the board to look at Mel Karmazin, who in June left his position as president of Viacom Inc. (VIA: Research, Estimates)

Disney Chairman George Mitchell said the board respected Eisner's decision and would keep looking for a successor.

A spokesman for Roy Disney and Gold declined to comment. But another Eisner critic suggested he should leave sooner than later.

"Eisner's resignation as CEO is the right move for shareowners," said Sean Harrigan, president of the California Public Employees' Retirement System, one of the nation's largest public pension systems, which voted its 9.9 million shares against retaining Eisner in March.

"We believe he should resign from the board as well. It is not clear to us how a two-year lame duck CEO will benefit shareowners, and his continued presence on the board would prevent the company from the clean break that is needed to restore investor confidence."

Harrigan said he would work with other public fund managers to push the Disney board to speed the succession process.

Analyst David Miller of Sanders Morris Harris said he believes there's at least a 60 percent chance that Iger will end up with the job, given Eisner's endorsement and the support for the CEO on the board.

Robert Iger

"Michael's been in the position for 20 years. He's had his ups and downs, but its mostly up though," said Miller. "I think he's earned right to chose his own successor."

But Wolzein said he thinks Disney's board will conduct a true, broad search of possible candidates.

"That doesn't preclude Iger from getting the job, but it's in interest of company to do as broad a search as possible," he said.

MediaTech Capital Partners media analyst Porter Bibb said current weak ratings at ABC could hurt Iger's chances. "After all he brought ABC to the table and it is failing," Bibb told CNNfn.

Iger joined ABC in 1974, and came to Disney with its purchase of the network.

In addition to the shareholder revolt, the company faced an unsolicited $54 billion takeover bid from Comcast, the nation's largest cable operator, but Disney's board rejected the offer, which was later withdrawn.

Eisner's letter makes no mention of his successor or even a reason for his plans to leave. But he does refer to the corporate turmoil of the last year.

"I have been told by you, by friends, but mostly by outside observers, that it is quite extraordinary that we have been able to remain focused on our objectives and have managed to run the company so well amidst the distractions that have taken huge chunks of time during the past several years," he said in the letter.

But in an interview with the Wall Street Journal published Friday, Eisner denied that critics had a role in his departure, which he said was "not asked for, not motivated by current circumstances at all."

He instead said the retirement plans satisfied both his personal and professional interests.

No Mickey Mouse deal • Eisner's employment contract

His letter to the board recalled how much the company has grown in his 20 years, with revenue rising to a projected $30 billion this year from $1.7 billion when he took over. It became a component of the Dow Jones industrial average in 1991.

He ended the letter with the company's famous advertising line, which he said had been suggested by his wife, Jane: "I'm going to Disneyland!"

The company acquired ABC and ESPN during his tenure, as well as independent film studio Miramax. It also opened several new theme parks.

But Disney has seen disappointing ratings at ABC and poor box office from many Disney films this year. The studio that pioneered animated movies aimed at children had no animated movie release this summer.

It sought to change gears and play catch-up with studios that now use computer-generated animation, which gives characters the 3-D appearance that's increasingly popular with current movie goers.

Roy Disney charged that Eisner's management style chased away some key talented executives.

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But at least some analysts said Eisner doesn't deserve all the blame heaped upon him in the last year.

"He's been such a lightning rod for criticism, oftentimes for things that were clearly not in his purview to make better," said Jeffrey Logsdon at Harris Nesbitt. "If theme park attendance goes down because of 9/11, is that Michael's fault?"

Logsdon said it is too soon to say if Eisner's departure will stop the criticism from some big Disney shareholders, but he doubted it would much lasting effect on the stock.  

-- None of the analysts quoted own Disney stock and their firms have no investment banking relationships with the company.