Where in the World Is Yahoo’s Board?
by Kara Swisher
Posted on November 13, 2008 at 5:05 AM PT
With a $10 stock price, the turning down of Microsoft’s $31 a share offer, a collapsed search advertising deal with Google (GOOG), fleeing execs and bad news aplenty, it’s easy to blame Yahoo CEO Jerry Yang and call for his ouster.
After all, the buck does stop with him.
Or does it? Because, to my mind, if there is anyone to cast stones at in the ongoing crisis at Yahoo, BoomTown would have to toss a large boulder in the direction of the company’s incredibly shrinking board.
The board is, after all, Yang’s boss and the ones charged with keeping Yahoo (YHOO) on track. That’s why their apparent stasis is just astonishing, if it were not quite so appalling.
And that’s also the opinion of major Yahoo investors, who have been watching with horror as their equity in the company has also shrunk to an infinitesimal size, with little apparent movement by the directors of Yahoo.
“They have no sense of urgency or seem to feel any pressure to do anything, even though by every metric they have failed,” said one investor I recently spoke to, who has been in touch with some Yahoo board members recently. “Should they kick Jerry out? Should they restart talks with Microsoft? Should they consider other options to turn the company around? And while they’re telling me they are going to do something, nothing happens.”
Said another big investor: “With all the other things going on in the economy, I have just decided to move on and write Yahoo off…but the lack of action by the board is really hard to understand.”
What’s hard to know is exactly what new board member Carl Icahn–the billionaire shareholder activist (pictured here), who joined after a very public fight with Yahoo, along with two others he hand-picked, former Nextel CEO John Chapple and former Viacom exec Frank Biondi–has been up to.
Not much, it seems, for the typically noisy gadfly, who owns five percent of Yahoo and has lost a fortune doing so.
Last week, Icahn did suddenly pop up on CNBC and make a declaration: “We believe as large shareholders that eventually we at Yahoo should, if available, make a deal with Microsoft to do search. We could save a fortune at Yahoo if Microsoft could do search for us.”
Yang himself made a similar suggestion at the Web 2.0 Summit last week that Yahoo was open to a deal to sell the whole company to Microsoft.
It was an offer Microsoft (MSFT) CEO Steve Ballmer shot down the very next day, although the software giant is still obviously interested in a search deal.
But sources at Microsoft tell me that Ballmer has said recently that he has no idea who to work with at the company to get anything done and that Yahoo–especially its board, since his relations with Yang have not been successful–has to be the one to act first.
That means, of course, that the ball is squarely in the Yahoo board’s court to do something–at this point, really, anything.
And those directors should be hard at work trying to hit it, instead of not even deigning to take a swing.
Comments
I have to say that I’m surprised by Carl’s lack of action, short of a few comments on the cable shows. I would have thought he’d be more active, if not more vocal. I was very disappointed before the shareholder meeting when Carl seemingly gave up without much of a fight. Perhaps if Jerry fought as hard to increase stockholder value as he did to save his job in August we’d be looking at a $25 stock. But that said, Jerry is clearly the wrong guy for the job, who lacks any clue have to navigate a publicly traded company, who lacks vision and who lacks direction. Sadly, I don’t expect much any longer from Yang, but as you note, the board is asleep at the swtich.
Posted by Mike Kane at November 13th, 2008 at 6:52 amThe world outside Yahoo saw this coming back in spring when Microsoft walked away from the table. Well done Jerry. You not only ruined the investment of many of your shareholders, you also ruined your legacy. I’m too surprised the angry mob did not break out the pitchforks and torches yet, spearheaded by Icahn. Maybe theres something boiling under the wraps…?
Posted by Jim Gomez at November 13th, 2008 at 7:05 amYou would think given Jerry’s miserable preformance that he’d spend less time giving lectures, and more time in the office. Who in their right mind would listen to what Yang has to say, unless he’s giving a speech on how your ego can get in the way of a fifty billion dollar ROI. The math here isn’t that difficult, and no matter how many PR flaks Yang surrounds himself with, he thought the company was worth $37 and today we’re at $9.92. He can’t escape that fact as it is demonstrative of how badly he blew it. If he had any honor or dignity at this point, he’d do us all a favor and resign. Honestly, at this point, the street would respond favorably if they replaced him with Mickey Mouse.
Posted by Mike Kane at November 13th, 2008 at 9:32 amThat’s your own personal individual perspective, Kara. Not all people share the same view as you, and actually, I think only you share that view. While I can respect that view, in my opinion, it is inaccurate.
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Posted by Nathaniel Dimtricus at November 13th, 2008 at 2:44 pmNathaniel: If you think Kara’s view is inaccurate, why not present your counter-view? This board has been asleep at the switch for many years now. That they are now responding so slowly – even with Icahn and the massive deterioriation of the stock price – is not a surprise. Past behavior predicts future behavior.
Posted by Eric Jackson at November 13th, 2008 at 7:41 pmN:
Only me? Hmm. I think only you think the board has performed well.
Posted by Kara Swisher at November 14th, 2008 at 6:32 pmyahoo’s board is like the 3 stooges; jerry ain’t quitting, he likes playing ceo and he has the cash to continue to play ceo as long as it keeps his ego expanding
Posted by Sam Harrison at November 16th, 2008 at 7:11 pmIt was delightful to see Bill and Steve sharing a stage and reminiscing about their stuff, but I was surprised that Bill (gadgets) and Steve (widgets) didn’t settle the debate about the original inventor of the widget.
One can never have too many widgets. Somebody codes something you never even dreamed of wanting – suddenly everybody
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