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Starboard Launches Proxy Fight To Remove Entire Yahoo Board (reuters.com)
An anonymous reader quotes a report from Reuters: Activist hedge fund Starboard Value LP moved on Thursday to overthrow the entire board of Yahoo Inc, including Chief Executive Marissa Mayer, who has struggled to turn around the company in her nearly four years at the helm. Starboard, which has been pushing for changes at Yahoo since 2014 and owns about 1.7 percent of the company, said it would nominate nine candidates for the board. The proxy fight comes as Yahoo is pressing ahead with an auction of its core Internet business, which includes search, mail and news sites. Yahoo and Starboard could still come to an agreement before the company's annual meeting, expected to be in late June. If they cannot avoid a proxy fight and the Yahoo board election is taken to a shareholder vote, attention will swing to the large mutual and index funds that own the stock and will carry heavy weight in the final tally. Yahoo and Starboard representatives met on March 10 to discuss ways the two sides could avoid a proxy fight, according to people familiar with the matter. But those talks broke down, in part because Starboard was upset by Yahoo's announcement that same day that it appointed two new board directors, these people say.
They could probably make a few bucks selling their office chairs.
One of the problems of public companies is this sort of thing...
Someone who owns less than 2% of the company is drawing massive attention towards something that will keep the leadership from doing what the company needs long term.
I would not be shocked if Marissa Mayer has had to devote a lot of time and energy to this sort of thing over the past 4 years, and probably has a much greater awareness of how hard the big chair is. Not because running a company is so hard, but because she has to deal with thousands of investors who all want to give their 2 cents.
This is one of the reasons that Dell went private, it was the only way to plan longer than 3 months in advance. Wall Street is so focused on quarterly numbers, it is really hard to make 5 year plans. If a company doesn't post impressive results quickly, the CEO gets tossed out and someone new brought it.
Let's just skip to the end and launch an initiative to remove Yahoo.
Seriously, who uses them?
No. The activist is merely leading. They would get nowhere without the complicity of institutions, who have clearly given up on Meyer. This is a great example of the system working.
The only thing a proxy fight can do is devalue the company even more. Just as the stupid fight to oust Marissa Meyer has devalued the company. Yahoo lost as a Big Internet company when it outsourced search to Google and focused on content. Content is hard, expensive, competitive and very hit or miss. By the time you know whether or not you have a winning combination you may have already moved on to try something else. And as far as I can tell Yahoo has just a few brand/content offerings that are very popular with everything else just kind puttering along. The Internet needs some more non-Facebook-Google-Twitter Internet companies to remain vital and it is too bad Yahoo has been on the long slide down.
Frankly, Marissa Mayer faced a nearly impossible job, turn around Yahoo!, a company that by 2012 was largely pointless in the Internet space and had failed to move into new spaces and allowed new companies to run right over it.
Ten years before, in 2002, it was a household name, however it largely has lost that due to not keeping up with the times.
It might well not have mattered who became CEO in 2012, the company was probably already past the point of no return. My mother uses Yahoo, as does my older brother. Our friends who have teenagers? They likely don't even know what Yahoo is.
I would not be shocked if Marissa Mayer has had to devote a lot of time and energy to this sort of thing over the past 4 years, and probably has a much greater awareness of how hard the big chair is. Not because running a company is so hard, but because she has to deal with thousands of investors who all want to give their 2 cents.
Unless you have millions of shares, you are ignored. The public relations department handles you with form letters - it's how I earned some money in college. We even blew off brokers and banks. In other words, unless you're enough of a big shot where you belong to the same social circles as the CEO, you're a nobody.
Secondly, Marissa is a shitty CEO. Like most techies, she has the business sense of a turnip. She was hired to do great things and so far is failing miserably - for the bargain pay of $60 million. If it were any of us peons, we'd have been escorted out by security and be struggling to find another job.
Yahoo! has been floundering for years and is now third place among Google and Facebook for online advertising. There is no long term plan. And all I see is more shitty advertisements interleaved with Yahoo! content. Their finance app has turned to shit. I mean, Yahoo! is a bunch of yahoos!
She idolizes Mayer and worships the ground she walks on. Without copying Mayer's every stupid move, Meg will be completely lost on what to do with Hewlett-Packard Enterprise.
Activist investors can only succeed when the management of a company is perceived to be doing poorly and do not control enough of the company stock to have that option. By ruin I assume you mean when a company is sold. Yes, the consolidation can lead to chaos in the employees lives (including mine), and massive short term profits for shareholders. It is important for all Americans subject to the former in their working lives also benefit from the later in their investment accounts. As a shareholder, I like when a credible activist gets involved.
If Starboard has taken over they should fire every web developer and person involved with the crapfest they call a web site. Since they changed to the horrid design I, and many others I know, haven't gone back.
It had to have been "redesigned" by a web developer because no one with any sort of common sense or scintilla of design comprehension would have thought it looks good or is usable.
The next up to be fired are the idiots who force people to give up their phone number to make an account. It doesn't do anything for security or prevent spammers from generating accounts. All it does is annoy people.
This is probably one of the few times a hedge fund taking over a company may actually produce something useful.
We will bankrupt ourselves in the vain search for absolute security. -- Dwight D. Eisenhower
http://www.wsj.com/articles/ce...
There needs to be new rules regarding boards of directors. For one thing, serving on multiple boards needs to stop. These people tend to be captive to CEOs anyway, and get their positions for that reason. That's how we got to a situation where the top-paid CEOs are not the top performing CEOs. Make a law that you can only serve on one board at a time.
You are welcome on my lawn.
Anyone willing to give a tl;dr explanation for those of us who don't want to get lost on Wikipedia for the next couple hours?
Wait wait....Yahoo has a board of directors? I'll need more proof than just this bland assertion.
Just cruising through this digital world at 33 1/3 rpm...
Yahoo seems like it's in the same category as AOL: Irrelevant. Does Yahoo even offer anything of value anymore? Or does it hang on in the same way that AOL hangs on: An aging userbase that doesn't know about anything else and/or just isn't willing to change until forced to do so? Maybe it's better off being broken up into bite-size pieces and sold off, maybe the new owners of said component pieces will do something relevant and useful with them.
Are YOU using the TOOL, or is the TOOL using YOU? Think about it!
I don't like telecommuting employees, especially in software. They aren't as productive and relevant as people with their butts at their desk..
Yahoo mail is still I think, pretty good. I still prefer Flickr for photo sharing and think they have done some good things there.
I think there are more people using Yahoo than many imagine ; as you say I can't see how they could have done any better with the position they were in. If Microsoft could not move the needle of Bing over Google, even owning the OS most people still use - well then what chance to Yahoo have?? None.
Yahoo still has a decent name and some good properties, it could be that now is the time for new directions that would really help the company grow.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
worst coming to worst.
All your database are belong to U.S.
What about Mayer's golden parachute? Surely they can invalidate it so she doesn't walk away a lottery winner after all these years YHOO hasn't turned around.
Kriston
That's right, I know a person who uses a Yahoo account as their second email account. That's ONE person out of many hundreds in my address book.
I know Firefox changed the default search to Yahoo, right? But I change it to duck duck go.
just not as much. And they're only worth less than their assets because of Alibaba, which unexpectedly exploded. And there's the rub. Take any company that's got assets worth a lot and somewhere out there is someone looking to gut the company and siphon off those assets for themselves. I looked up an old store called Yellow Front that I used to love when I was a kid and found they had that happen to them too. Profitable company that owned a lot of land so someone bought 'em, sold the land and shut down the company. Happened to Mervyn's too. Like Science Fiction? You can thank this business method for killing off all the great sci-fi monthlies. Their distributor owned a bunch of land too. After they lost their distributor they all went under before they could find a new one (this was the 50s, getting a new distribution network in place wasn't easy). It's so common we have a name for it: Bained.
Best quote I ever read was this: The stock market is no longer a method for getting capital into successful businesses, but for getting it out.
Hi! I make Firefox Plug-ins. Check 'em out @ https://addons.mozilla.org/en-US/firefox/addon/youtube-mp3-podcaster/
Check out the classic business book "Business Adventures: Twelve Classic Tales from the World of Wall Street"
There's a whole chapter talking about public shareholder meetings and the massive imbalance between management and shareholders.
The takaway is that company management usually operates with total impunity, rarely reigned in by Boards or shareholders.
I find the 'next quarter' focus of Wall Street as idiotic as the next guy, but activist shareholders definitely have NOT had the upper hand, historically.
Amazon Link to Book (apparently one of Bill Gates' favorites, FWIW)
https://read.amazon.com/kp/embed?asin=B00L1TPCKW&preview=newtab&linkCode=kpe&ref_=cm_sw_r_kb_dp_q9h9wb1JVCQ3K
> Wall Street is so focused on quarterly numbers, it is really hard to make 5 year plans.
Wall Street is particularly focused on whether or not those quarterly numbers match forecasts or not. Losing money every quarter, like Amazon did for years, along with many other companies, is fine IF you're hitting the numbers in your five-year plan, and that plan has a path to profitability eventually.
What doesn't inspire investor confidence is when you lay out a plan that includes increasing revenue by 5% and decreasing expenses by 15%, then you actually do the opposite- decreasing revenue and increasing expenses. You absolutely can follow a five year plan, and even plan to lose money the first four years, but you'd better execute the plan you communicated.
If you can't execute the plan, well maybe you shouldn't be the executive.
They can do whatever they want, as long as they don't mess with finance.yahoo.com. It's been a great site, preserved in time, unchanged, for probably 15 years now. Every so often they roll out their new Beta version, and it's garbage. Why must websites insist on re-doing everything just for the sake of change?
Losing money every quarter, like Amazon did for years, along with many other companies, is fine IF you're hitting the numbers in your five-year plan, and that plan has a path to profitability eventually.
You make an interesting point, but also point out how little discipline most investors really have.
Amazon was supposed to long ago be profitable, they have moved the goal posts so many times, I'd really have to do some research to find the original plan.
Amazon STILL doesn't make any money, long after that date, but for some reason, investors love it.
I love Amazon as a customer, but as a business, they are a mess. All the bad stuff of a huge retailer without the good stuff, and very little barrier to entry to competition.
Yahoo.com is the number 1 web portal in the USA. Alexa ranks yahoo.com as number 5, and MSN.com as number 25. web portals have high fixed costs, and low incremental costs, so Yahoo is worth something. Revenue of $4 billion, profit of $100 million, and employing 10,000 people is a decent company. Yahoo is not a tech giant, and should not pretend to be. I think Yahoo should have done even less tech stuff, just like Yahoo Japan.
Amazon is SO well known, and was so "hot" for a while that people made irrational investments in Amazon. That probably also included quite large proportion of people who either had never picked stocks before or don't understand and use the fundamental numbers. As such, it was a bit of a bad example for my point.
That said, I understand they've now had two or three consecutive days profitable quarters, and the price dropped 13% on the day they announced that they had failed to meet projections - that things weren't going quite according plan. So yeah bad example of my original point.
Yes, Yahoo is old. Just look at all the comments here claiming that only old people still use it.
And everybody knows that old people are stupid. Old people are so incredibly stupid that they actually lived when there was no Internet and pretty much no home computers, and by some unexplained miracle they managed to grow, study, learn, work, get laid, marry then raise and support the little pieces of shit that are now grown, well fed and have computers to ridicule old people on thw interwebtubes.
So what is this highfallutin new wonder stuff that all the clever kids use today? Google. The company that went from "be no evil" (and the super smart youngsters believed that) to helping the military develop killing machines. The company that spies on absolutely fucking everybody who dares use the Internet. Oh yes, THAT is the smart thing to do! Not those ridiculous choices that old people make. Old people are dumb! Duh!
And while you're getting your glorified GAnusProbe rammed up your no longer existing privacy, make sure you also enjoy all the fine life and culture that the super brilliant young people of today enshrine and old people will never be smart enough to appreciate: Justin Bieber, Miley Cirus, Oprah, Beyoncé, Judd Apatow, Ashton Kutscher, the "legacy" of Steve Jobs, no buttons (you don't need them!), Windows 10, the immeasureable heights of intelligence of Twitter, the insurmountable premium standards of Facebook user-generated content, an endless supply of cooking and/or reality TV shows and the unfathomable depth of their celebrities, an endless supply of super hero movies and super hero uniform redesigns to quench this current super genius generation's thirst for the most profoundly life-changing, innovative stories, characters and concepts from the 1950/60s (when that golden - golden, Jerry! culture was treated like nothing more than entertainment for children as crazy and absurd as that may sound), and... let's not forget the unprecedented, till then unheard of wisdom of posting nekkid pictures over media and data formats that are extremely easy to reproduce and distribute by anyone without any special skills and cannot be revoked.
Oh, yes! Old things and people are shit. Young people rule. Young people are awesome.
...as long as they restore the old Flickr and Yahoo Groups interfaces.
No, I haven't forgotten, and no, the years haven't dulled my hate for the steaming piles of shit that those two platforms have been turned into.
:) In fairness, I did pick on that part, but I will admit that you are not being unreasonable in your original post re: Yahoo.
I would agree that she hasn't done much for Yahoo, or so it appears. I just don't know that anyone could have.
Will she survive? Meh, thankfully not my problem and she is wealthy enough that she won't be going hungry over it. :)
I didn't even go to yahoo.com after this story. I Googled yahoo and read about yahoo on Wikipedia. :) Yahoo's relevance isn't just about web design anymore.
Yahoo, is a bunch of softies who refused to innovate.. ..
They are pompous, arrogent, and short sighted..
Their business model was and is vaporware
The exec, staph(lack there-of) are both ignorant and corrupt..
How yahoo continues to exist, is beyond me. Much like a boyle, growth, or a cancer on the Arse of Society..
The people whom are running the office dont have a clue. As an example: STEP into their NOC and it will become evident very quickly.
Talk with them, and you are talking to KIDS.
Walk with them, you soon realize they breathe and have a pulse, 2 major qualifications satisfied for the Yahoo Hiring process.
Yahoo like Lycos or astla-la-vista, your time has finally come..Marissa thank you so much for validating my assertions here, thank you for "f*ck*ng" up the company at time when I may be looking for work..
last but not least, on a positive note.
I would like to take a moment to say thank you Yahoo for al of the charitable contributions over the years. Being it takes such little knoledge, effort, etc thats something we can count of Yahoo to be apart of, or even excell in..
Who knows..
But when it comes, dont be a b1tch about it, just go quietly, like the song by Motley Cru, "girl dont go away mad, girl just go away.."
She won't go hungry, but the employees will. That's the problem right now, employees pretty much do all the hard work but get none of the benefits/money the shareholders do. You can be the best employee ever, but be shitcanned tomorrow because PROFITS.
I don't have an answer, just observations.
This happen to my father. Worked for clear channel/penn advertisement for 30+ years. iHeart Media purchased clear channel and changed the wage structure. My father went from making $6000 a month to $3500 a month overnight. Almost half his pay gone. He went from hourly pay to a scaled pay. Luckily he retired 2 years later. Company has been going to shit since the acquisition.