Shot Heard Round the Yahoo

(We hope...)

Activist Eric Jackson and other frustrated Yahoo shareholders won big at the Yahoo! Annual Meeting yesterday, even though the company's recommended slate of directors still passed.  Persuading nearly a third of normally rubber-stamping shareholders to vote AGAINST management is a major success, and one can only hope that Terry got the message. 

Terry's remaining supporters usually point to the stock's having gone up a lot since he joined the company and suggest that Yahoo's current woes are merely a temporary lull that all good companies go through.  This defense ignores that the average stock in the industry is up a lot, too (NASDAQ has doubled), and that a competitor that barely existed when Terry joined the company is now worth 5 times as much as Yahoo. 

Yahoo's failure to maintain its lead in search and instead concentrate on more traditional media efforts was a colossal strategic error that Yahoo's shareholders will forever have to pay for.  Everyone makes mistakes, of course, and Terry's experience helped Yahoo through a challenging period after the dotcom crash.  The skills required to return Yahoo to Internet greatness now, however, are different than those that helped stabilize it in the bust. 

Terry believes he has the Internet-greatness skills, and he's certainly been paid as though he does.  Despite his confidence, however, every day that goes by sees Yahoo fall further and further behind.  So no wonder a growing number of shareholders think it's time for a change.

Comments

[Royal]

I watched the webcast. Unbelievably, Semel was *not* directly confronted on the most obvious question:

"What objective measures did the board use to arrive at Semel's comp package?"

There's only one measure that shareholders care about... since GOOG went public: GOOG up 6 times... YHOO down -4%.

Yet, Semel is the #1 top compensated CEO in 2006. (AP analysis of 386 public companies and top corporate paychecks.)

Yesterday's annual meeting confirmed it: The inmates ARE running the asylum.

In fact, the way the pay-for-performance proposal was dismissed was almost offensive. "Deemed not in best interest of shareholders."

Having some experience with this stuff, it seems to me that YHOO's board should be deemed *not* in the best interest of shareholders.

Don't know why this gets me so heated but I think it represents the worst abuse of corporate governance and exec comp.

P.S. I never did get an answer to a previously posted question: Did YHOO actually miss last quarter's numbers because of the size of Semel's comp package? From the data I could get, I think YHOO would have beat by a penny instead of miss by a penny. Any way you can confirm that?

P.P.S. What is chance private equity will take out YHOO?

[Victor]

Yahoo faces the same secular problem AOL did. It's trying to be the ultimate walled-garden on the Internet. That's not how people use the Internet. They flit from place-to-place looking for the best information and services. In that world Google wins, because it's the beast helping users do their flitting. Yahoo is dead until it's bought. And the only company that could eat Yahoo without choking is Google. Microsoft would go into convulsions and die if it tried the same surfeit.

[dub dub]

Wow, that's quite a spin on this disastrous attempt at Yahoo shareholder activism. If this is the best they can muster, they deserve what they got, and what they'll get.

[Victor]

http://online.wsj.com/article/SB118177624212634541.html?mod=googlenews_wsj

Ebay drops ads from Google. Who loses? This seems like a loss to both companies. Google loses dollars, Ebay loses leads, and also dollars. In the end, I think Google has more leverage since ebay, while being a large customer, is only a fraction of Google's massive income

[Victor]

http://www.thestreet.com/_yahoo/newsanalysis/technet/10362600.html?cm_ven=YAHOO&cm_cat=FREE&cm_ite=NA

more on the ebay-google falling out

[dub dub]

Victor: please learn how to use tinyurl.com
thanks!

[Trading Online Free]

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[Ryan]

Semel is out as CEO and Yang is in....

Thoughts... You heard it here first!!!

[sakthi]

Since Semel has several times admits himself, he is not a internet expert,probably he should step down as CEO long before..I think his biggest mistake in his tenure was failing to buy Google...
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[sohbet]

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