Saturday, August 02, 2008

Wall Street Journal: Yahoo Shareholders Endorse Board

Criticism Is Sparse Over Microsoft Bid At Annual Meeting

August 2, 2008; Page B6

Yahoo Inc. faced little criticism at its annual meeting over the issue that had been expected to be center stage: its rejection of multiple deal offers from Microsoft Corp.

Shareholders overwhelmingly endorsed the board, with Yahoo Chairman Roy Bostock receiving a 79.5% favorable vote, up from roughly two-thirds last year. Some 85.4% of votes were cast in support of Chief Executive Jerry Yang, down from more than 90% last year but still a strong endorsement for a leader who has faced calls for his resignation.

The results suggest that investors who have been harping about the company's handling of Microsoft negotiations are moving on -- or have decided to sell their stock. Yahoo shares have fallen roughly 30% from when Microsoft withdrew its $47.5 billion, $33-a-share offer, to acquire the company in May. Friday, the company's stock traded relatively flat and was at $19.80 in 4 p.m. composite trading on the Nasdaq Stock Market.

The meeting, in San Jose, Calif., was a tame follow to a bitter battle. Investor Carl Icahn, who settled his proxy fight for the company last month, didn't attend the two-hour meeting. Under the settlement, Mr. Icahn and two other directors will join Yahoo's board.

While Mr. Bostock addressed months of negotiations with Microsoft in detail, investors didn't dwell on the topic, besides a few brief or passing remarks. Shareholders instead pressed management on human-rights issues, executive compensation and its strategy against Google Inc.

Several investors interviewed at the meeting said they still are holding out for Microsoft to make another offer to buy Yahoo's search business, and they think a move is fairly likely in the coming months. That sentiment could be keeping up Yahoo shares to some degree.

Eric Jackson, a small Yahoo shareholder representing a group of shareholders who own 3.2 million shares, has been critical of Yahoo's handling of the bid but raised the issue only briefly, saying to Mr. Bostock: "You overplayed your hand...and overstayed your welcome."

Mr. Bostock responded by saying that Mr. Jackson was mischaracterizing the facts. Mr. Bostock kicked off the meeting by reviewing the months of "twists and turns" between Microsoft's Jan. 31 bid and its truce with Mr. Icahn last month. At every step of the way, he said, Yahoo's board sought to increase shareholder value.

"There was never a compelling offer put on the table," he said, adding he still doesn't know why Microsoft withdrew its original offer.

In a statement, Microsoft said, "Yahoo is attempting to rewrite history yet again with statements that are not supported by the facts."

Mr. Bostock cracked several jokes about the long hours spent on the deal, noting he would be happy to share a time sheet of all the hours he logged on it. He said he has been working "26 hours in a 24-hour day."

Mr. Yang, who has been waging a battle to keep his job, walked through the company's plan to expand by building new products, including a new platform that makes it easier to buy advertising online. The company also has realigned its advertising business, he said, and has succeeded at implementing a more technologically savvy leadership team.

"This is a company we are very excited and determined to transform," he said. "There is no other company on the Internet that has this collection of assets."

The meeting didn't address who will join the board along with Mr. Icahn. The new members are to be selected by Aug. 15. While there had been some speculation that Yahoo was likely to select Jonathan Miller, the former chief executive of AOL, as one of the board members, Time Warner Inc., AOL's owner, said Friday that Mr. Miller had agreed not to work for Yahoo as part of his noncompete agreement with Time Warner.

Write to Jessica E. Vascellaro at

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