Yahoo Shareholders Submit "Plan B"

From yesterday's BusinessWeek.com /AP by Riva Richmond of Dow Jones:

Eric Jackson, the minor Yahoo Inc. shareholder who has been leading a Web effort to organize dissident investors, on Friday submitted the group's strategic "Plan B" for the company while also nominating himself to the board.

Jackson, who owns only 45 Yahoo shares, said he delivered the plan to Yahoo and intends to present it at the company's annual meeting in May. He also submitted a formal request to have his name added to the slate of potential directors up for vote at that meeting. Yahoo didn't immediately respond to a request for comment.

Using community-building tools that have grown popular on the Web, Jackson has assembled a group of shareholders -- who together own 911,666 Yahoo shares worth about $29 million -- to push for the plan. His organizing drive began in early January and has employed a blog, YouTube video appeals and a wiki, a collaborative Web site that allows supporters to take part in creating the alternative strategic plan.

Jackson said he has lobbied half of Yahoo's largest institutional holders to join the group.
"While none will publicly support our Plan B, they all have vowed to review it thoroughly and vote independently," Jackson wrote on his Breakout Performance blog Friday.

Jackson announced the finalized plan online beside a picture of Martin Luther King Jr. delivering the "I Have a Dream" speech. In a YouTube video, he promised to "campaign" for the plan by using the Web, since he doesn't have the funds to wage a traditional proxy fight, which he said would cost $200,000.

"I'll be kissing some babies. I'll be kissing some gray-haired money managers," Jackson said.

The group's nine-point plan calls for Terry Semel to be replaced as chairman and chief executive, citing "strategic missteps" that include his failure to acquire Google Inc. in 2002. The plan also faults Semel for loss of search-market share to Google and outsized compensation despite a 14 percent share-price decline since January 2005.

The plan also calls for the ouster of six other directors, the shuttering of Yahoo's media group and Los Angeles offices, additional investment in technology research and development, reduced product overlaps, pay-for-performance compensation for managers, stepped-up stock buybacks, a cash dividend, and elimination of antitakeover measures.

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