Yahoo Shareholder Pushes New Plan - The First Three Points
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The first point is the immediate replacement of Terry Semel as Yahoo’s chairman and CEO. Jackson lists a number of missteps Semel made during his tenure, including the failure to purchase Google in 2002, MySpace in 2005, and YouTube in 2006. He also argues persuasively that Yahoo’s loss of shareholder value is a cause for dismissal. While acknowledging that Semel’s defenders will point to a rise of 227 percent since Semel started at Yahoo in 2001, Jackson points out that most of that gain, which occurred over a one-year period, “had to do with a general recovery in the Internet Advertising market, which benefited Yahoo and its two main rivals – Google and Microsoft – during this time.” Jackson also points to Yahoo’s eroding market share in search as evidence that Semel’s tenure has been toxic to Yahoo. With Terry Semel already 64 years old, it might make more sense to seek his immediate retirement rather than his head.
The second point concerns Yahoo’s board of directors. Jackson and his fellow shareholding sympathizers want to see six out of the ten directors replaced: Terry Semel, Robert Kotick, Roy Bostock, Ron Burkle, Eric Hippeau, Arthur Kern, and Gary Wilson. The only members they want to see stay include Jerry Yang (co-founder of Yahoo), Ed Kozel, and Vyomesh Joshi.
From the explanation given, Jackson holds those six board members as most responsible for Yahoo’s recent missteps (because Semel reports to the board) and believes they must be held accountable. As for the ones favored by Jackson, Kozel and Joshi have directly purchased Yahoo shares, but the other board members “have only exercised stock options of late.” It’s worth pointing out at this juncture that Eric Jackson has nominated himself to the board, so he might have more than just the other shareholders’ interests at heart.
The third point involves the Yahoo Media Group and campus in the Los Angeles area. Jackson wants to see it closed because “There are no meaningful outputs from the group to speak of which have had any positive shareholder value-creating impact.” The Yahoo Media Group was created a little over a year ago and run by former ABC TV executive Lloyd Braun. The goal, apparently, was to enhance Yahoo’s content and therefore attract more visitors. It was part of a larger strategy to be a bigger player in the entertainment field, which seems a natural move given Semel’s 24 years at Warner Brothers. It’s a move, Jackson insists, that hasn’t worked for Yahoo.
Next: The Next Four Points >>
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