Tuesday, January 29, 2008

The Deal: Eric Jackson still thinking about Yahoo!

From The Deal.com

[Posted on January 29, 2008 - 7:00 AM]

Eric Jackson made a name for himself last year, when he united a group of Yahoo! Inc. [YHOO] shareholders, predominantly through the Internet, and badgered the company to oust chairman and CEO Terry Semel.

"I have major concerns about the company and I'm not sure about the way they responded to my suggestions since last year," Jackson said. "I'm still a shareholder, and I'm still hopeful, but to be honest, I think there is potentially lower hanging fruit elsewhere to run my campaigns against."

Like many other shareholders and company analysts, Jackson believes Yahoo! needs to make some drastic changes in order to re-invigorate the company and make it more relevant. Those changes include large layoffs, outsourcing its search business to Microsoft Corp. [MSFT] or Google Inc. [GOOG] or even a sale of the company. But Jackson said through conversations he's had with company co-founders Jerry Yang (currently the CEO) and David Filo, and people who have worked with them, that the pair have no current plans to find a buyer.

"I honestly believe that Jerry Yang and David Filo have no interest in selling the company," he said. "Other people could decide differently, but they're pretty big shareholders and carry a lot of weight. It's not going to change shareholders calling for a sale, but I think people underestimate how the two co-founders are so against a sale."

Yahoo! will report fourth quarter 2007 earnings after the market closes on Tuesday. It also is expected to announce layoffs, though the the size of the cuts continues to be debated in the blogsphere. Jackson said he doesn't expect Yahoo! to announce anything "to make investors excited," but still holds out hope that the Internet giant can turn around its fortunes.

"This is a company with incredible traffic, brand awareness and loyalty," he said. "Even though they haven't done that much to come up with new offerings, people love this company. But they're going to have to get much more of an urgency on the board. I think as time goes on, shareholders are going to get more and more frustrated." -- David Shabelman

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