Voices » Jerry Yang

The Web Will Be the Death of Google

Boris Veldhuijzen van Zanten — Thu, 04 Jun 2009 07:05:03 +0000

By Boris Veldhuijzen van Zanten, Serial Internet Entrepreneur, the NEXT web

There is a famous story about a meeting between Yahoo and Microsoft which took place when Yahoo was still a small start-up. Yahoo was growing at neck-breaking speed and David Filo and Jerry Yang were invited to Redmond to talk about working together.

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A Night to Remember

Nitrozac and Snaggy — Wed, 19 Nov 2008 16:16:42 +0000

By Nitrozac and Snaggy

With Jerry Yang Gone, What Yahoo Should Do Next

Om Malik — Wed, 19 Nov 2008 08:00:13 +0000

By Om Malik, Founder and Senior Writer, GigaOM

With Yahoo CEO Jerry Yang gone, and the company actively seeking his replacement, the big question is what should it do next and whom should it hire to replace Yang? Kara Swisher has a lot of names on her short list, though I don’t think any one of them will prove to be Yahoo’s knight in shining armor. Regardless of the company’s final choice, here is what Yahoo shouldn’t do.

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Why Is Jerry Yang Still in Charge?

Daniel Lyons — Mon, 20 Oct 2008 07:00:02 +0000

By Daniel Lyons, Writer, Techtonic Shifts, Newsweek

Eight months ago, Yahoo! CEO Jerry Yang had a chance to sell his company to Microsoft for $43 billion. He refused. Now Yahoo’s (YHOO) market value stands at $18 billion. This raises a question: Why is Jerry Yang still running this company? “Nobody knows this company better than Jerry Yang,” Yahoo Chairman Roy Bostock says. “He put in place a strategic plan in 2007 and under extraordinary circumstances has been executing well against it. Jerry is the right person to continue to lead Yahoo.” Bostock says the company’s board has no regrets about the way Yang handled the Microsoft (MSFT) offer. “We analyzed the offer eight ways to Sunday, with advisers from Goldman Sachs and Lehman, and we determined that the initial offer of $31 per share significantly undervalued the company,” he says. “Not one of our investors encouraged us or suggested we should sell the company at $31 per share. Not a single investor.” He adds that Yahoo was willing to sell at a higher price, and that Microsoft, not Yahoo, walked away from the deal (as you’d expect, Microsoft blames Yahoo).

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After Vote-Gate, Heads Must Roll on Yahoo's Board

Eric Jackson — Thu, 07 Aug 2008 00:00:50 +0000

By Eric Jackson, Managing Member, Ironfire Capital LLC

To anyone who says that it’s inconsequential that Yahoo understated the level of shareholder dissatisfaction by more than half thanks to a “tabulation error” by its proxy counter, Broadridge Financial Solutions, I say: You couldn’t be more wrong.

This incident will have ramifications in the coming weeks for the composition of Yahoo’s board. But here’s the shocking thing: This latest batch of numbers might still underrepresent the level of disdain shareholders have for this board.

Any corporate election that doesn’t receive 95 to 98 percent support from shareholders for the incumbent management and board is an anomaly. Yahoo’s first press release from last Friday suggested that, despite all the hubbub of the failed merger talks with Microsoft and public criticism from Carl Icahn and others, Yahoo (YHOO) shareholders had let the incumbents off the hook.

Chairman Roy Bostock and CEO Jerry Yang were re-elected with 79.5 percent and 84 percent support respectively. These relatively benign results (compared to last year’s), combined with the fact that there were not more pointed questions at the meeting last week, led some observers to conclude that this board had “faced down” its critics.

Not quite. Gordon Crawford of Capital Research Global Investors did all Yahoo shareholders a favor by demanding a recount. Yahoo and Broadridge complied.

And results of that recount were alarmingly different from the first set of numbers. We’ve all heard of +/- 4 percent in polling, but when was the last time you heard of +/- 50 percent?

The recount might set a modern-day record among S&P 500 companies for the most “withhold” votes for a board in a corporate election. Only Vyomesh Joshi, head of Hewlett-Packard’s (HPQ) printer group, got off without a serious warning from shareholders (a 7.1 percent “withhold” vote).

The “withhold” vote for Bostock was 39.6 percent, not 20.5 percent as originally reported. And 33.7 percent of Yahoo shareholders withheld their support from Yang, not 14.6 percent.

Other Yahoo directors who fared poorly in the election were Gary Wilson (27.7 percent of votes withheld) and Compensation committee members Ronald Burkle (37.9 percent withheld) and Arthur Kern (31.7 percent withheld).

What would we all be doing today if Crawford had never called for a recount? If a “tabulation error” happens and no one is there to hear it, did it happen at all? We will never know.

And there will likely be more shoes to drop in this tragedy of errors. This “tabulation error” was only one of two major question marks surrounding last Friday’s initial voting results. Yahoo easily made Broadridge the fall guy for this first error.

The second error–how few eligible shares were counted in the final tally–isn’t so easily eluded. And for that, Yahoo will be the fall guy.

Only 75.8 percent of the eligible shares as of the June 3 record date were voted in this election. After such intense media scrutiny in the past few months, it seems odd that so few investors participated.

Last weekend, I dove into the numbers in detail and reviewed them against numbers from the last two Yahoo elections. On Sunday night I wrote about the most recent Yahoo shareholder vote and verified that there were 200 million fewer votes cast this year compared to the average over the last two years. I called on Yahoo to appoint an independent third party to review and certify the voting process.

Yesterday, as news of the voting irregularities circulated, I received a number of complaints from frustrated shareholders.

Some claimed they had received multiple proxies from Yahoo over the last month, with several arriving Aug. 4–the Monday after the election. Some said they had had trouble voting by phone. Others, who had initially voted for Icahn’s slate, said when they tried to re-vote against the Yahoo board, they weren’t able to do so.

How many other shareholders encountered similar difficulties? Without a full inquiry, we’ll never know.

These missing votes could have had an even more significant impact on the overall results. For example, Bostock received “for” votes from fewer than half of the total shares eligible to vote (only 45.8 percent of the 1.4 billion shares eligible to vote). He truly lacks the approval of the majority of the shareholders he is supposed to represent. With a 47 percent vote, Burkle also lacks majority support. And while Yang won majority support, he did so by the skin of his teeth, with just a 50.2 percent vote.

Governance Matters

At Friday’s meeting, I asked Yang, Yahoo President Sue Decker and Bostock about three issues that suggest to me that Yahoo’s governance oversight has been lax.

(1)

(2) Decker serves on three Fortune 500 boards: Intel (INTC), Costco (COST), and Berkshire Hathaway (BRK). Her duties to those companies required her to attend at least 22 meetings last year, according to proxy filings. And each meeting required significant preparation. As a Yahoo shareholder, I fail to see how outside commitments like these benefit Yahoo. Are they really necessary? Shouldn’t Decker drop a few of them until Yahoo finds solid footing again?

(3) About a third–31 to 36 percent–of Yahoo shareholders voted against the re-election of Roy Bostock and fellow Compensation Committee members Burkle and Kern last year. Yet all three continue to sit on this committee (or the board). Why? And why did they agree to pay outside directors average total compensation of $500,000 last year? Google’s (GOOG) outside directors were paid $250,000, on average, for their services last year. Decker received $2,700 for sitting on the Berkshire Hathaway board (and $110,000 per year for serving on the Intel and Costco boards). Why is Yahoo paying its directors so much?

I found the trio’s answers to these questions unconvincing. Particularly surprising were Bostock’s comments on Compensation Committee member tenure and compensation.

In the first place, Bostock said while 32 percent of shareholders voted against his reelection last year, 68 percent voted for him. And that’s not bad, he said. This glass-half-full logic explains why he has never bothered to explain to shareholders why he, Burkle and Kern have remained on the Compensation Committee and the Yahoo board.

Second, Bostock disputed my assertion that Yahoo’s outside directors were paid an average of $500,000 last year. When I asked him if he was definitively stating that he did not receive compensation of about $500,000 last year, he said “yes.” Yet, according to Yahoo’s own proxy statement, Bostock earned total compensation of $499,264 last year. 2007 compensation for Yahoo’s other board members was as follows:

Ronald Burkle: $482,046
Eric Hippeau: $496,674
Vyomesh Joshi: $519,520
Arthur Kern: $496,990
Robert Kotick: $492,774
Edward Kozel: $516,202
Mary Agnes Wilderotter: $205,832 (for five months of service; annualized $493,997)
Gary Wilson: $482,046

The average compensation for each Yahoo outside director in 2007: $497,531.

Third, Bostock also claimed that this year’s vote would be a far better indication of shareholder support for Yahoo’s Compensation Committee than last year. With 39.6 percent of shareholders withholding support from Bostock and 37.9 percent withholding it from Burkle, isn’t it time for them to step aside?

Fool Me Once, Shame on You; Fool Me Twice, Shame on Me

Given all this, I am deeply concerned that my interests and those of all Yahoo shareholders are not being protected by the company’s board.

We need to know why 200 million shares were missing from this year’s vote as compared to the last two years’.

We need to know why so many proxies were mailed late to shareholders (on our dime).

We need to know why so many shareholders are questioning whether their votes were counted.

Yahoo will try to sweep all these concerns under the rug, but we shouldn’t allow it. The company should immediately appoint an independent third party to address these questions and assure shareholders that their votes were properly counted.

Immediate Changes to the Board

Also, Yahoo needs to immediately make some changes to the composition of its board. Bostock and Burkle should do the honorable thing and step down from this board.

In truth, this should have happened a year ago. One wonders what might have happened in the last 12 months with Microsoft negotiations had Yahoo acted swiftly, following the 2007 annual meeting, to remove them.

Eric Jackson is the Founder and Managing Member of Ironfire Capital LLC, an activist hedge fund. In 2007, he founded the “Yahoo! Plan B” group, a Web-based group of 150 Yahoo shareholders who own more than 3.2 million shares, in a campaign to change the company’s direction.

Chief Yahoo Has Some Breathing Room–For Now

Therese Poletti — Fri, 25 Jul 2008 22:24:02 +0000

By Therese Poletti, Senior Columnist, MarketWatch, Tech Tales

Jerry Yang sounded downright confident on the company’s conference call with analysts earlier this week, despite the lackluster results for the Internet giant’s second quarter.
He even cracked wise with investors, noting lightly at the onset of the call that Yahoo Inc. (YHOO)
had “quite a disclaimer.” He chimed in as executives took questions, answering more than is his custom and sounding more upbeat than he had all year.
“Frankly I think Yahoo’s ability to perform is especially impressive in light of the extraordinary events surrounding the company this year,” Yang said in his preamble.

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Jerry Yang's Annus Horribilis

Therese Poletti — Thu, 19 Jun 2008 06:10:52 +0000

By Therese Poletti, Senior Columnist, MarketWatch, Tech Tales

Should he be or not be the CEO?

That is the question many are asking this week about Jerry Yang, the Yahoo co-founder and chief executive who’s marking his first anniversary in the top job.

Like Shakespeare’s Hamlet, Yang has suffered “the slings and arrows of outrageous fortune” since he soundly rejected Microsoft’s offer to buy Yahoo at an initial 62 percent premium. He, along with the directors on the board, infuriated many shareholders with their hard stance against selling the company, and by then forging a search deal with nemesis Google that further alienated Wall Street.

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Voting With Their Feet? File This One Under "Stampede"

Charles Cooper — Wed, 18 Jun 2008 07:00:47 +0000

By Charles Cooper, Executive Editor of Commentary, CNET News.com

If Jerry Yang has been saving up a “band of brothers” moment with his troops, this is it. The departure of Flickr’s co-founders, the husband-and-wife team of Caterina Fake and Stewart Butterfield, follows the earlier resignation of Jeff Weiner, who was executive vice president of Yahoo’s network division.

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Idiot's Guide to Fixing Yahoo

R. Scott Raynovich — Thu, 12 Jun 2008 07:00:10 +0000

By R. Scott Raynovich, Publisher, Contentinople

The great CEOs are always focused on products and product marketing. Three that come to mind: Steve Jobs, Bill Gates and Eric Schmidt. The products are: Mac & iPod, Windows and Google Search. What’s Yahoo’s great product? What’s its marketing focus? … If I were one of the shareholders voting on the proxy, here’s a question I would ask: If Yahoo is going to remain independent, what kind of company is it going to be?

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Workplace Porn

Quentin Hardy — Thu, 12 Jun 2008 07:00:03 +0000

By Quentin Hardy, Silicon Valley Bureau Manager, Forbes

Jerry Yang, your stock is in trouble. This time, it’s not (necessarily) the value of Yahoo, where Yang is chief executive, that is cause for concern, but the way Yang’s staff feels about him, at least according to reports from start-up Glassdoor.com. The new Web site, based in Sausalito, Calif., aims to uncover salaries, work conditions and workplace attitudes of employees at some of America’s biggest companies by collecting contributions from current employees.

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D6: Rupert Murdoch for Obama? Not Quite…. But

Om Malik — Thu, 29 May 2008 16:38:09 +0000

By Om Malik, Founder, Editor, GigaOm

Today at the D6:Conference, the corporate doyens and business leaders were out in full force, both on and off stage. Those who were grilled on stage showed were true to their form–Amazon’s Jeff Bezos charmed everyone with optimism for Kindle, Yahoo’s Jerry Yang was all emotion and patience, and Mark Zuckerberg of Facebook showed that he is still a young fella brimming with big dreams.

But it was the wily old Fox, News Corp founder Rupert Murdoch who proved to the most charming, candid, amusing, honest and informative at the same time. Candid enough to admit that there isn’t anyone to really compete with him. Honest enough to point out what a mess both Microsoft and Yahoo made out of their deal, and Google is still a great partner. About Yahoo and Microsoft he said: I’m mystified. I can’t understand the whole thing? Neither can we, Mr. Murdoch. He talked at length about the future of media, both on and offline. His responses to a barrage of questions was lucid and refreshingly without corporate speak. He talked about online video, Hulu and future of movie distribution.

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Liveblogging: Yahoo's Decker and Yang

John Battelle — Thu, 29 May 2008 16:30:37 +0000

By John Battelle, Founder and CEO, Federated Media

After a funny film featuring nearly every luminary under the sun giving Yang and Decker advice (Buffet, Stringer, Zuckerberg, etc.), Yang and Decker took the stage and Walt immediately asked them about the MSFT deal. Yang agreed that they could not get to a price, but that there were other issues as well. Regulatory is one that came up, but I can imagine others (i.e., approach to open source, total installs of Outlook at Yahoo, etc.!).

What is the concept around the Google deal? Yang: We feel strongly about how we monetize search, but there is clearly a value gap between us and (Google), we want to make it clear to our shareholders that there are other untapped sources of value that should we want to tap that…could be significant…” We’ve conducted tests with them and we have some understandings…as to the level of discussion…we are uniquely positioned ….should anything be done (between Google and Yahoo) it’d be unique… Yahoo has the ability to remain very competitive in the advertising space…the level and flexibility of how we might partner has not been well understood…(he doesn’t want to talk about it)…

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Adios, Amateur Hour. The Big Dog Marks His Turf

Charles Cooper — Thu, 15 May 2008 07:02:56 +0000

By Charles Cooper, Executive Editor of Commentary, CNET News.com

Jerry Yang was able to rope-a-dope Steve Ballmer. But he’s never had to square off against a royal pain in the ass like Carl Icahn. Wednesday afternoon, Icahn, a billionaire with a God complex — or is that repetitive? — wrote a new chapter in this deliciously goofy Microhoo saga when he launched plans for a proxy contest to challenge Yahoo’s famously feckless board of directors with his own handpicked nominees.

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Yahoo: Can Icahn Get MSFT Back to the Table?

Eric Savitz — Wed, 14 May 2008 15:04:47 +0000

By Eric Savitz, Blogger and Columnist, Barron’s

So here’s the basic conundrum in this whole concept of Carl Icahn launching a proxy contest for Yahoo (YHOO): What’s the point unless he can get Microsoft (MSFT) to launch a new bid?

It is certainly possible that institutional investors are sufficiently irritated at Yahoo CEO Jerry Yang and the company’s board that they might want to oust some or all of the directors. But to what end?

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Jerry: You Wanted Independence, So Back Away From Google Slowly…

Kevin Maney — Fri, 09 May 2008 07:05:34 +0000

By Kevin Maney, Blogger, Tech Observer, Portfolio.com

Reports, rumors and innuendos are bouncing around the Web that Google may not want to cut an advertising deal with Yahoo after all. This before there is actually substantiation that Google and Yahoo are crafting an advertising deal, which was something of a rumor and innuendo in the first place, allegedly planted to let Microsoft know that Yahoo had options.

Google is allegedly worried about ticking off Washington officials who might think that if Google is playing ball with Yahoo, Google has become an antitrust violator that must be terminated. As if Google isn’t already close to monopoly power in search. It gets 67% of all searches, and that share keeps growing. Google worrying that a Yahoo deal will push it over the brink in antitrust is like Kim Jong-il worrying that if he puts on a party hat he’ll be considered crazy.

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