More Press on "Plan B"

Here's some great press from yesterday. As of this morning, our committed investors in Yahoo! have a collective ownership stake worth approximately $1.8MM -- and YHOO is up 5.27% since we began our activism at the start of the week.

From the NY Times' DealBook:

Tilting at Yahoo With a Web Site and Wiki
January 11, 2007, 3:13 pm

Eric Jackson is not happy that Yahoo has lost more than a third of its market value over the past year. But since he holds fewer than 1,000 shares of the Internet giant, he lacks the muscle of big-time activist shareholders such as Carl Icahn, Nelson Peltz or Ralph Whitworth, who have wrested concessions from the likes of ImClone Systems, Wendy’s International and Home Depot in recent months. Still, Mr. Jackson hopes to use the Internet to consolidate the anger of other small shareholders, attempting to become what TheStreet.com’s Vishesh Kumar describes as an “virtual activist investor.”

For Yahoo shareholders, a grim year

In a set of ideas for Yahoo that he collects under the title “Plan B,” he has demanded the immediate replacement of Yahoo Chief Terry Semel with Susan Decker, the chief financial officer and Mr. Semel’s heir apparent. He also wants the company to restructure again — but this time more radically, by consolidating overlapping divisions.

By creating a wiki, which allows users to create and edit material on the site, Mr. Jackson is opening up his own ideas to criticism and revision. Others have already said that others besides Ms. Decker should be considered as candidates for Mr. Semel’s job.

But as TheStreet.com’s Mr. Kumar points out, a group of shareholders is only as powerful as the investment they represent. Mr. Jackson says he wants his group to eventually represent 10 percent of Yahoo’s stock. That seems “outlandish,” by Mr. Kumar’s reckoning, but Mr. Jackson thinks he can swell his ranks by inducing Yahoo users to each buy, say, 50 shares and join the group.

That would mean 25 million users — “as daunting a task as they come,” Mr. Kumar write, “but the group could still become a force to be reckoned with even if it controlled far less than a 10 percent stake.”

As of Thursday, Mr. Jackson claimed on his blog to have garnered the support of Yahoo shareholders who collectively hold stock worth $1.7 million. Based on Yahoo’s market capitalization of about $39.8 billion, that is an equity stake of about 0.004 percent.

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From Henry Blodget's Internet Outsider:

Grass-Roots Yahoo Shareholder Wants to Boot Terry

A small Yahoo shareholder, Eric Jackson, is trying to organize a grassroots web campaign to complete the baby-step shakeup Yahoo announced last month. The idea of organizing shareholders via the web is an excellent one (albeit quite challenging), and Jackson has already made some progress. The Street's Vishesh Kumar has a good piece about the effort.

Chief among Jackson's Yahoo proposals is to immediately promote Sue Decker to CEO. I agree wholeheartedly with this, because I think otherwise the company will be in suspended animation until the new CFO and Group Head are in place and Terry's successor is clear (a process that could take at least a year). This isn't an anti-Terry position; it's just a pro-Yahoo one. Until the shakeup has been completed and the company's management structure is clear, every valuable employee will have only one eye on the business. The other will be on the "send" button, ready to send out their resumes.

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From Mathew Ingram's Blog:

A Web 2.0 revolt against Yahoo management

Posted by Mathew Ingram @ 4:09 pm on Thursday 11 January 2007

As Mark Twain once said, everyone complains about the weather but no one ever does anything about it. Well, lots of people complain about Yahoo too — about how it is big and bloated and unfocused and is losing ground to Google, not to mention the fact that its peanut butter is spread too thin — but is anyone doing anything about it? Eric Jackson is trying to.

Eric, a Yahoo shareholder and management consultant who writes a blog called Breakout Performance, is like Peter Finch’s character from the movie Network. He’s mad as hell and he’s not going to take it any more. So Mr. Jackson wrote a post called Yahoo Plan B, complete with a video clip of himself describing said plan, and sent it out to various places, including YouTube.

In a nutshell, Eric is trying to get a wave of shareholder support for change, in the same way that activist hedge funds and other prominent investors often do, except he’s starting with blogs and YouTube and wikis instead of a board seat and a couple of hundred million. He says:
Yahoo! is drifting; and its board and management have been too slow to act to this fundamental problem. As shareholders, we don’t have to sit by and watch this.

Activist Investing has principally been the domain of hedge funds — well, no longer. With the help of the web, blogs, and wikis, I’m asking all current and future retail investors in Yahoo! to join me in pushing for a change.

So far, Eric has gotten some favourable press at TheStreet, as well as from former trader David Neubert, and the Internet Outsider blog, written by former analyst and Bubble 1.0 cheerleader Henry Blodget.

Eric says he has received many emails of support, and now has shareholders with more than $1.7-million in Yahoo stock who are backing his campaign. Not exactly a hedge fund, but not a bad start. Good luck with the crusade, Eric.

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