San Francisco Chronicle: Yahoo partisans go online with buyout opinions

Ellen Lee, Chronicle Staff Writer

Thursday, February 14, 2008

From his bedroom in Naples, Fla., Yahoo shareholder Eric Jackson stares into the camera and calls on fellow investors to join his campaign to push Yahoo Inc. to accept Microsoft Corp.'s $44.6 billion unsolicited takeover bid.

"We do not have to sit back as shareholders and wait for whatever plays out," he says in his video, called "Yahoo Shareholders in Favor of Selling," which has generated more than 700 views on YouTube.

Jackson's clip is among dozens posted on the video-sharing site by Yahoo shareholders and netizens who refuse to let the multibillion-dollar deal play out in secret board meetings and negotiations.

While corporate officials try to win over large shareholders, everyone from loyal customers to frustrated shareholders to the corporations themselves are chiming in on blogs, podcasts, Facebook and just about every channel the new media has to offer in hopes of swaying the decision-makers.

"The nature of the conversation has become bigger, and the number of people participating has increased," said Shel Holtz, an independent online communications consultant in Concord. "You combine that with people being passionate about the properties they use, and you're going to see a lot of conversation here."

On Facebook, member groups include "Microsoft, leave flickr alone," "Yahoo don't sell out to Microsoft" and even, "Flickr no se vende a Microsoft."

And it's only natural that the two tech titans facing a possible merger would tap the very resources they helped develop and foster.

"So much of their constituents, their partners, employees and shareholders all exist online," said Michael Robinson, senior vice president at Levick Strategic Communications, a crisis management firm. "This is very different than if you had two chemical companies trying to merge."

The opinions started flying from the beginning.

Microsoft, which wants to go head-to-head with Google in online advertising, announced its unsolicited $31-per-share offer to acquire the Sunnyvale Web portal on Feb. 1. Yahoo rejected the offer on Monday, saying the price doesn't reflect the company's worth.

Microsoft vows to continue its acquisition attempt, which could turn hostile, and Yahoo is searching for a white knight to rescue the company from Microsoft's clutches.

Days after Microsoft made its overture, rival Google waded in - on its corporate blog. "Could Microsoft now attempt to exert the same sort of inappropriate and illegal influence over the Internet that it did with the PC?" asked David Drummond, Google's senior vice president of corporate development and chief legal officer at googleblog.blogspot.com.

Yahoo is posting updates on its blog, Yodel Anecdotal, at ycorpblog.com. Its Feb. 1 entry has drawn 111 comments, both in support of and against Yahoo selling to Microsoft.

"I would love to see Microsoft and Yahoo come together! Google is too powerful!" wrote one commentator.

But another threatened, "If you sell out to Microsoft, I will immediately move my e-mail account elsewhere."

Last year, Jackson, the Yahoo shareholder, used Web 2.0 tools to lobby for the removal of several directors from Yahoo's board. This time, the founder of Ironfire Capital, an activist investment firm, said he hoped to find other shareholders who share his belief that Yahoo should sell the company to the highest bidder.

Along with his YouTube video, he is blogging at Breakout Performance (breakoutperformance.blogspot.com) and using YouChoose.net to track support for his cause. About 2.1 million shares - out of about 1.39 billion outstanding Yahoo shares - have been informally pledged, he said.

"I hope to attract like-minded shareholders," Jackson said. "We have more power together. ... If we remain a bunch of individual shareholders with our 50 shares, we are not going to be wooed. We'd like to be wooed."

Just as in other marketing campaigns, using Web 2.0 presents challenges. Negative or angry opinions can't be stifled, viral messages can take on a life of their own and while Yahoo and Microsoft may be able to influence the discussions, they can't manage them.

Both Yahoo and Microsoft have limited their public statements. Spokespeople for the two companies declined to discuss how they could use the latest Internet tools to influence public opinion on the deal.

But if a deal nears, or if it becomes a hostile takeover, they could kick off a more aggressive campaign. In the past, corporations have pushed their messages through traditional channels, such as leaking information to the media or running advertisements. This time, they could add social media to the mix, said Judy Radlinsky, vice president of the Hoffman Agency and the director of corporate public relations at Hewlett-Packard during the HP-Compaq contest.

It's not the first time corporations locked in a takeover fight have taken it to the Web. In 1995, both IBM and Lotus used the Internet, publishing comments on their Web sites. Fast-forward more than 10 years and the tools have become much more powerful.

"It's a brave new world," said Tom Taulli, founder of DealPro-files.com and author of "The Complete M&A Handbook." "You want to be everywhere and get your message out."

Online resources
Eric Jackson's YouTube video: youtube.com/watch?v=5zIUIH8vQQ8


YouTube videos on the proposed merger: links.sfgate.com/ZCLC


Yahoo blog: ycorpblog.com


Google blog: googleblog.blogspot.com


Microsoft blog: microsoft.com/communities/blogs


Breakout Performance: breakoutperformance.blogspot.com


E-mail Ellen Lee at elee@sfchronicle.com.

Sphere: Related Content