BoomTown » Eric Hippeau

As Traffic Booms, Is HuffPo Ready to Make Some Real Dough?

Kara Swisher — Tue, 20 Oct 2009 16:21:53 +0000

For the past few months, the Huffington Post has been on a bit of a tear–both in terms of traffic gains and in its hiring of some big talent for key positions.

Now, those execs are focusing on using that consumer momentum to achieve what has eluded the Huffington Post thus far: Making some serious bank from the privately held news and media site.

How to help marketers to better understand the site and, therefore, spur this significant monetization will be his main focus at the Huffington Post, said Greg Coleman to BoomTown in an interview over the weekend.

Coleman–a former Yahoo (YHOO) advertising exec, as well as one for Time Warner (TWX) online unit AOL–was named president and chief revenue officer a month ago by Huffington Post’s new CEO, Eric Hippeau.

Hippeau, who was himself just appointed in June, is another well-known online media exec and has been a big investor and board member of the Huffington Post. (You can read a thorough interview by Staci Kramer with Hippeau on paidContent.)

“It’s important for advertisers to know how big we have gotten, while also highlighting this amazing audience of influencers we have gathered,” said Coleman, in his first media chitchat since taking on the job. “I think it is the beginning of a tipping point.”

Well, of course, Coleman would say that, as the guy looking to drum up interest among marketers in spending their money on the Huffington Post.

But stats seem to indicate that consumers are increasingly liking what the Huffington Post is creating, because it is starting to surpass some well-known media icons on the Web in traffic.

While more of this increase is going to be due to a socialization of the news–the Huffington Post has an aggressive deployment of Facebook Connect called HuffPost Social News–the growth is more about building a brand people trust and seek out.

According to recent reports from both comScore (SCOR) and Nielsen Online, for example, the site just became larger than several online brands of big media companies, such as the Washington Post (WPO), in terms of unique monthly visitors.

In its September report, Nielsen clocked the Huffington Post at 9.47 million uniques, up 26 percent, while the Post site was at 9.2 million–a drop of 30 percent.

According to the Nielsen, the Huffington Post is within spitting distance of USA Today’s Web site (9.9 million), a Gannett (GCI) property.

And, it is bigger than Hearst Newspapers Digital (7.9 million) and the BBC (7.2 million).

For September, comScore has the Huffington Post (at 6.83 million) besting the Post (6.77 million)–as well as WSJ.com (6.7 million), a unit of Dow Jones, which is owned by News Corp. (NWS).

(The Wall Street Journal site, to be fair, makes a chunk of its revenue from subscription fees, rather than relying solely on advertising from traffic like the Huffington Post. And full disclosure: Dow Jones owns this site.)

In any case, big traffic is key for most news sites, and internal numbers from Google (GOOG) Analytics that Huffington Post execs cite are higher, as is typical for most sites, pegging traffic at about 27 million monthly uniques with more than two million reader comments per month.

Huffington Post co-founder and blogging icon Arianna Huffington attributes the recent boost in traffic to the site’s proclivity to “start conversations” that interest readers, such as her recent suggestion that Vice President Joe Biden should resign.

“We are aiming to go beyond just facts, to create a narrative,” said Huffington, who thinks the speed of news helps attract visitors to the site. “We think bringing journalism to a new level is exactly what people are looking for.”

Perhaps. But, even if traffic increases continue to bear her theories out, she and others have said that the Huffington Post still has not been regularly profitable despite doubling annual revenue–mostly in advertising–to what some estimate to be about $8 million in 2009.

While the site is aiming to invest rather than focus too hard on showing profits, Coleman said he would like to make revenue seven times larger in the next years, building on the performance of the site to vaunt past old media giants online.

“This kind of thing is a milestone for the marketing community,” he said. “Our goal is to be the top Internet newspaper, and this points out that we are on our way.”

To do that, he will have to spend some of the $37 million in funding that the Huffington Post has raised from venture investors.

While the edit side is using the money to expand the number of news categories, Coleman said his focus will be on building a higher caliber team of sales and marketing execs with deeper relationships to big clients.

“Unlike selling an auto page on Yahoo (YHOO), our site has a more complex sales process that takes some time for people to understand,” said Coleman. “But once they get it, it should be an easier sale.”

Until then, check out the video of the entire interview I did at the seventh D: All Things Digital conference with Huffington and Washington Post publisher Katharine Weymouth in which they talk about the future of journalism and more:

[ See post to watch video ]

Former Yahoo and AOL Ad Exec Coleman Poised to Join the Huffington Post as President

Kara Swisher — Wed, 16 Sep 2009 13:40:28 +0000

In the ongoing game of Internet exec musical chairs, Greg Coleman (pictured here), who has been a top exec at both Yahoo and AOL, is poised to become president of the Huffington Post, as well as chief revenue officer, several sources said.

The deal for Coleman to come on board at the privately held online news site–which has grown significantly over the last year and just added well-known online media exec Eric Hippeau as CEO–came together only recently.

And it is not clear what the role of current Huffington Post Chief Revenue Officer James Smith will be going forward.

The Coleman hiring is most likely the work of Hippeau, who has known him from Coleman’s days as head of ad sales at Yahoo (YHOO). Hippeau has been on the board of the Internet giant for many years.

Hippeau was also a key player in the $5 million investment in the Huffington Post by SoftBank Capital in 2006.

He has also been a director on its small board, which also includes co-founders Arianna Huffington and Kenny Lerer, as well as Oak Investment Partners’ Fred Harman.

Oak recently added $25 million to the funding kitty at the Huffington Post, which is headquartered in New York.

The money will be used to expand the site into the local arena, investigative news, and verticals such as tech, a section set to debut Sept. 21.

It is all being done to build on what has been a strong traffic year for the Huffington Post, which claims it has over 21 million unique monthly visitors.

Nielsen Online has pegged that at the lower figure of 8.9 million, but reported that the Huffington Post was one of the fastest-growing, year-over-year news sites.

Despite that, the site still has not been regularly profitable, despite doubling annual revenue–mostly in advertising–to what some estimate to be about $8 million in 2009.

Presumably, goosing that revenue is what Coleman is being pegged to help do–and he certainly has a lot of online advertising experience, having made stops at a lot of Internet companies in the past few years.

He was head of advertising sales at Yahoo for seven years, after another long stint at Reader’s Digest. Yahoo’s ad business grew strongly under him.

But Coleman ran into Yahoo’s management buzzsaw after trouble hit the company in 2007. He was one of the first in a long line of execs to leave the troubled company, departing in one of its many controversial reorganizations.

He was soon running a Los Angeles-based start-up called NetSeer, which focuses on ad targeting.

He then headed to AOL in February to run its Platform-A division.

But when new management was suddenly put in place by Time Warner (TWX) in the spring, Coleman left after only a few months on the job.

After taking the summer off, several sources said, he has recently been looking at a variety of jobs.

That included MySpace, where former Yahoo colleague Wenda Harris Millard–now with Media Link–was hired recently as an outside consultant to help the News Corp. (NWS) social networking site rejigger its ad business.

The Huffington Post spokesman declined to comment when BoomTown inquired about Coleman’s hiring.

Huffington Post and Facebook Go "Social News," With Connect on Steroids

Kara Swisher — Mon, 17 Aug 2009 06:00:21 +0000

In an unusually robust collaboration using Facebook Connect, the Huffington Post is launching a feature on Monday called “HuffPost Social News,” which lets readers create a personalized social networking-like news page on the Huffington Post itself.

While the Huffington Post had already been using Facebook Connect since January–which allows readers of the site to log in using their Facebook identity to interact, which is mostly used to leave comments–this use essentially takes Facebook Connect and puts it on steroids.

“We are looking at HuffPost Social News like a ‘digital water cooler,’ because we see news going in that direction,” said Huffington Post Editor-in-Chief and co-founder Arianna Huffington, in an interview with me this weekend. “We did this because we are interested in real identities having real conversations about news.”

While the use of “social news” will be seen by some as simply a clever PR term, this kind of innovative deployment on the Huffington Post is actually a very big step for the site, especially as an opportunity to bind its readers to it more closely, presumably increasing engagement and traffic.

“This is a natural way to expand into the Facebook community and give users who desire to engage and comment with friends more privacy,” said Huffington Post CEO Eric Hippeau, with whom I also spoke earlier today. “And, like a lot of other sites, we are trying to make our site more attractive to marketers who want to engage with engaged users.”

Hippeau said he hopes that will lead to more advertising spending, although the first focus is to get people using it.

Such a move is an interesting one for Facebook too, since it is getting unusual prominence and much deeper integration on a popular news Web site, well beyond how other sites are using Facebook Connect.

If it works, HuffPost Social News will give it even more content flowing into its service, a direction that was also underscored by Facebook’s recent $50 million purchase of FriendFeed, the online content-sharing site.

Goosing interactivity and engagement is a big aim for Facebook and also lots of news sites, such as the Huffington Post.

While there are about 1.7 million comments on the site monthly, for example, if users sign up for HuffPost Social News at large rates, that could expand a lot.

This will be done via the special page, as well as a large module on every Huffington Post page you visit showing what your Facebook friends who also sign up for HuffPost Social News are posting, what’s most popular in your network and on the site itself.

As is usually the case with Facebook Connect, you can decide what is sent back to Facebook and can also hide your movements from HuffPost Social News by going into a “stealth” mode.

If left turned on, though, it captures your every click on the site, including what you are reading–which means my social site should constantly be filled with news of Britney and LiLo.

“HuffPost Social News finds your Facebook friends who are also reading HuffPost and links you together on our site so you can dive deeper into the stories you like best,” wrote Huffington in a blog post to readers of her site, which you can read in its entirely below. “The explosive growth of online social networking has fundamentally changed our relationship with news. It’s no longer something we passively take in.”

You can see that in action below on a page I created and also my module (click on the images to make them larger):

Main Personalized Page

Module

And here’s the official press release from the Huffington Post, as well as two blog posts on the subject by Arianna Huffington, one for her site and one for Facebook:

THE HUFFINGTON POST LAUNCHES NEW COLLABORATION WITH FACEBOOK–HUFFPOST SOCIAL NEWS

SOCIAL NEWS PLATFORM COMBINES POWER OF FACEBOOK WITH HUFFPOST CONTENT AND COMMUNITY

Aug 17, 2009–(New York, NY)–The Huffington Post (”HuffPost”) announced today the launch of HuffPost Social News, a collaboration between HuffPost and Facebook® that connects HuffPost users with their Facebook friends, the news they are reading and the stories they are commenting on. Through its integration of Facebook Connect, HuffPost Social News seamlessly combines the news and opinion of HuffPost with Facebook’s user experience and power to connect people.

“I’m excited to announce the launch of HuffPost Social News,” said Arianna Huffington, co-founder and editor-in-chief of The Huffington Post. “This new platform lets our community of engaged users easily share stories and post comments for friends to see–it’s HuffPost’s version of a digital water cooler, enriching and deepening conversations around the day’s news. Social media has fundamentally changed our relationship to news. It’s no longer something we passively take in. We now engage with news, share news, react to news–news has become something around which we gather, connect, and converse. HuffPost Social News makes this more dynamic than ever.”

Said Eric Hippeau, CEO of The Huffington Post: “Our goal is to make HuffPost Social News the go-to place for Facebook users to share news–both the stories they love and the stories they hate–with friends. It should also appeal to marketers interested in reaching passionate, savvy readers who care about the news and who want to share their interests with friends.”

Said Sheryl Sandberg, COO of Facebook: “The Huffington Post has led a revolution in how people discover and consume news. With the integration of Facebook Connect, HuffPost Social News is now leading the way to make news even more of a social experience, giving people new ways to share and filter news and current events through their networks of friends on Facebook.”

HuffPost Social News allows users to increase their presence on The Huffington Post by automatically creating personalized profile pages that keep track of all their HuffPost Social News friends. At the same time, users retain complete control over what stories and comments are shared with their Social News friends, as well as what is posted to their Facebook Wall, and into their Facebook stream. Users can also see how their friends are voting on HuffPost polls and their contributions to “Eyes & Ears,” Huffpost’s citizen journalism platform.

Said Paul Berry, Chief Technology Officer of The Huffington Post: “From the first brainstorming session in Facebook’s office to the integration of Facebook Connect, it has been truly exciting to collaborate in building this product. The future of news is social, and I’m tremendously proud that HuffPost has been so early in reaching this important milestone in how news is shared online.”

Your HuffPost Experience Is About to Get a Lot More Social!

I’m excited to announce the launch of HuffPost Social News–a collaboration with Facebook that connects HuffPost users to their Facebook friends, the news they are reading, and the stories they are commenting on.

When you sign up for it–and I hope you will right now–HuffPost Social News finds your Facebook friends who are also reading HuffPost and links you together on our site so you can dive deeper into the stories you like best. (But don’t worry, you’ll still have complete control over what stories and comments are shared with your friends, as well as what goes on your Facebook wall, and into your friends’ news feeds.)

The explosive growth of online social networking has fundamentally changed our relationship with news. It’s no longer something we passively take in. We now engage with news, react to news, and share news. News has become an important element of community–something around which we gather, connect, and converse. And we can all become part of the evolution of a story now–expanding it with comments and links to relevant information, adding facts and differing points of views.

HuffPost Social News makes this easier and more dynamic than ever. It takes social news to a whole new level. It will turbo-charge your online conversations and connections, and allow you to build and develop a community that follows what you read and care about.

Thanks to your passion and commitment, HuffPost has an incredibly active and vibrant community. You posted over 1.7 million comments on the site last month alone–with many stories attracting more than 10,000 comments. The one drawback: it’s sometimes hard to keep up with it all.

With HuffPost Social News, you can be sure that your comments won’t get lost in the mix–and that the people you care most about will see what you have to say about the stories you love or are angered by, delivered in real time. And you’ll be able to easily and immediately see who is replying to any of your comments. Of course, your comments will still appear on the full thread, so anyone reading HuffPost will be able to see them.

HuffPost Social News also taps into the other coming big trend in news: personalization. People connecting to each other using their real identities and having real conversations.

HuffPost Social News allows you to have a greater presence on our site by automatically creating personalized profile pages that keep track of all your HuffPost Social News friends–collecting all the comments you have made and the stories you have read, as well as the comments made and stories read by your friends. Think of it as HuffPost’s new digital water cooler.

HuffPost Social News is just one early piece of the social transformation of the news industry. We will be adding more social features and personalization in the coming months. The news is simply more interesting and engaging when we experience it with friends. It is an exciting change and we are thrilled to be part of it.

Sign up here to get started. And let us know what you think. HuffPost Social News is your Huffington Post.

The Future of News Will Be Social

Arianna Huffington is the co-founder and editor-in-chief of The Huffington Post, a nationally syndicated columnist, and author of 12 books. With HuffPost launching a new social news feature today using Facebook Connect, we asked her to share her perspective on the ways social media is shaping the future of news.

Despite all the current hand-wringing about the dire state of newspapers, we are actually in the midst of a Golden Age for news consumers. We can surf the net, use search engines, access the best stories from around the world, and interact by commenting and forming communities.

The days of publishing pooh-bahs dictating to us what’s important and what’s not are over. We now can get the news we want, when we want it, how we want it and where we want it. The Web has given us control over the news we consume. Now the explosive growth of online social networking is fundamentally changing our relationship with news as well. It’s no longer something we passively take in.

We now engage with news, react to news and share news. News has become an important element of community–something around which we gather, connect and converse. We all are part of the evolution of a story now–expanding it with comments and links to relevant information, adding facts and differing points of views. In short, the news has become social.

And it will become even more community-powered: stories will be collaboratively produced by editors and the community, and conversations, opinion, and reader reactions will be seamlessly integrated into the news experience.

I’ve always been obsessed with news. As the daughter of a newspaperman, I grew up with the smell of newsprint and the buzz of breaking news. I’ve also always enjoyed bringing people together from different parts of my life and facilitating interesting conversations.

In the past, these have taken place around dinner tables, on group hikes or at book parties. Now, via cyberspace, those conversations have gone global. And they are happening in real time.

One of the reasons we launched The Huffington Post was to enhance and facilitate those conversations. While our goal was to create a one-stop spot for news and opinion with an attitude, community has always been a key element of the site. The launch of HuffPost Social News today brings together my two loves:nonstop news and the passionate discussion of the news with my friends.

Using Facebook Connect, HuffPost Social News weaves the news and opinion of HuffPost with the social capabilities of Facebook. It connects HuffPost users to their Facebook friends, the news they are reading, and the stories they are commenting on.

Want to know what your friends are reading? Check out their Facebook-powered stream on HuffPost and the personalized Social News widget that appears as you navigate the site. Want to see your friends’ comments above the thousands of strangers commenting on a story? Log in to HuffPost Social News using Facebook Connect and that happens automatically.

HuffPost Social News also taps into another big trend I see emerging in news: personalization. People connect to each other using their real identities and have real conversations. HuffPost Social News is just one early piece of the social transformation of the news industry. We will be adding more social features and personalization in the coming months, and I expect to see news organizations around the world doing the same.

The news is simply more interesting and engaging when we experience it with friends.

Arianna Talks About New CEO, New Local Sites and Paying for Content

Kara Swisher — Mon, 22 Jun 2009 10:34:46 +0000

Huffington Post co-founder and blogging diva Arianna Huffington was in Berkeley this past weekend, keynoting at the Craigslist Foundation Boot Camp 2009.

So, BoomTown took the opportunity to motor over the Bay Bridge to catch Huffington on video between sessions, talking about all the big changes at the news Web site of late.

The interview includes the replacement of its CEO with well-known media exec Eric Hippeau, the launch today of another of its local sites–this time, New York–in an effort to move beyond politics, and what she thinks about the controversies around paying for content on the Web.

Here’s the interview:

[ See post to watch video ]

BoomTown Interviews Arianna, Ken and Eric About Huffington Post Exec Changes: BAM!!

Kara Swisher — Tue, 16 Jun 2009 01:18:43 +0000

Apparently, if you want to think about the growth of the Huffington Post as a culinary dish, perhaps today’s replacement of CEO Betsy Morgan with longtime online media powerhouse Eric Hippeau might appear under the Emeril Lagasse cooking cliché: Let’s kick it up a notch!

Both co-founders of the online media site, Arianna Huffington and Kenneth Lerer, said as much in interviews I did with them this afternoon, after news of the change got out–even as they praised Morgan for the strong work she had done in the 18 months she had been in charge.

“The deal is that we simply have been growing so fast that we needed more firepower to accelerate in expanding the site and monetizing it,” said Huffington, who is also editor-in-chief of the Web news site (and pictured above).

“Things are going great, but things could be going even greater,” added Lerer, who is chairman of the Huffington Post, noting that a more experienced exec was needed at this juncture to take the business to the next level.

“Eric is a peer at all the big companies we need to partner and deal with…and right now, while things are difficult in the economy, is the time when you can really build a company and we had to take advantage of that opportunity.”

So, ipso facto, Morgan was out in favor of Hippeau, who was the key player in the $5 million investment in the Huffington Post by SoftBank Capital in 2006.

Hippeau is a director on its small board, which also includes Huffington, Lerer and Oak Investment Partners’ Fred Harman. Morgan will be vacating her board seat.

Oak recently added $25 million to the funding kitty at the Huffington Post, money that Lerer and Huffington said had not been used yet.

But it soon will be, both noted, with the site expanding aggressively into the local arena, investigative news and verticals such as tech.

It is all being done to build on what has been a strong traffic year for the Huffington Post, which claims it has over 21 million unique monthly visitors.

Nielsen Online has pegged that at the lower figure of 8.9 million, but reported that the Huffington Post was one of the fastest-growing, year-over-year news sites.

Despite that, the site still has not been regularly profitable, said Huffington, despite doubling annual revenue–mostly in advertising–to what some estimate to be about $8 million in 2009.

Hippeau (pictured here) has a lot of experience working at a panoply of early online media businesses, including as CEO of Ziff-Davis.

He has also been a longtime Web investor, pushing for SoftBank’s early investment in Yahoo (YHOO), where Hippeau remains a board member.

That should not present a conflict for Yahoo, said Hippeau, which had a short-lived publishing partnership with the Huffington Post.

Hippeau, who has been a managing partner at SoftBank, will become a special partner and adviser to the investment firm. In this capacity, he will continue to work with three start-ups–Buddy Media, BuzzFeed and ThumbPlay.

Hippeau, who is now diving back into an operating role for the first time in almost a decade, said it was hard to pass up the chance to run the New York-based Huffington Post.

“I could not pass such an opportunity, especially with the explosion in the delivery of the news and opinion on the Web,” he said. “This is really the place to build the next really big brand.”

To get to that level, Hippeau said that a lot of things have to happen at the site going forward.

“Clearly we have got to make the revenues commensurate with traffic of the site and size of the opportunity,” he said. “At the same time, we have got to make sure we are very community-focused and using all kinds of new tools to increase engagement.”

Hippeau noted that journalism was changing radically, and “what people want to know is what are people thinking and how can I contribute and we are just at the beginning of this phase.”

Of particular interest to him are real-time data and real-time communications–on sites like Twitter–and the growth of smartphone usage.

“We are getting into a situation in the U.S., where it is so much easier to access all kinds of information and so much more portable,” said Hippeau. “Everyone has talked about convergence for a long time and it is finally here and we are poised to take great advantage of that.”

The moves at the Huffington Post were first reported by paidContent.org.

Huffington appeared onstage at the recent D: All Things Digital conference with Washington Post (WPO) publisher Katharine Weymouth.

Here is a highlights video of the interview I did with them:

[ See post to watch video ]

Here's the Official HuffPost $25 Million Funding Press Release

Kara Swisher — Mon, 01 Dec 2008 12:06:09 +0000

Here’s the official press release from the popular news and blogging site, The Huffington Post, which announced $25 million in funding from Oak Investment Partners this morning.

(BoomTown’s story on the funding is here, along with an interview with Oak’s Fred Harman)

Sources told BoomTown the investment gives the site–which had 4.5 million unique visitors in September, a quadrupling from a year ago–a valuation of “south of $100 million.”

Here’s the official release:

The Huffington Post Announces $25 Million In Funding From Oak Investment Partners

New York, NY (December 1, 2008)–The Huffington Post, a leading news and opinion site, today announced that it has secured $25 million in funding from Oak Investment Partners, a venture capital firm based in Palo Alto, California. The Huffington Post (”HuffPost”) will use the proceeds to invest in the growth of the company and for select and focused acquisitions. The company said it would invest in its technology and infrastructure, increase its in-house advertising capabilities, and continue to expand its content offerings–including a new investigative journalism initiative and a rollout of local versions of The Huffington Post in select cities. The announcement was made by Arianna Huffington and Kenneth Lerer, co-founders of The Huffington Post.

“This commitment from Oak Investment Partners will allow us to accelerate our growth, with more verticals, more video, more citizen journalism initiatives, more cities for our local editions, and a fund for investigative journalism,” said Arianna Huffington. “We are particularly excited to have Fred Harman of Oak join our board; his deep knowledge of the new media landscape will help us to take HuffPost to the next level.”

Said Kenneth Lerer: “We are thrilled to bring on board a partner like Oak to work with Softbank Capital and Greycroft [Partners] as we move forward. Since launching the site three and half years ago, the company has built a strong brand and an audience of millions who rely on the site for its mix of smart news and opinion. The additional capital from Oak will enable us to go full-steam ahead with operations and select acquisitions.”

Fred Harman, general partner at Oak Investment Partners, said, “Much of the news media business needs to be reassembled online around an ad-supported model and the timetable for this has been accelerated, not slowed, by this economic down cycle. We believe that The Huffington Post has built a platform and business model to be among the leaders in aggregating this audience online. Our financing will provide the resources necessary to scale the company, both organically as well as through acquisitions of additional talent and new media companies. We are also very excited to have the opportunity to back Arianna, Betsy, and the company’s strong entrepreneurial team.”

Betsy Morgan, CEO of The Huffington Post, said, “With funding from Oak, The Huffington Post is perfectly positioned to build on its incredible growth. Oak brings to the table a team with enormous experience and insight, and we look forward to working with them to seize the opportunities ahead of us.”

The Series C financing round comes as The Huffington Post continues to experience significant growth following the expansion of the site in 2007, when HuffPost began rolling out a variety of new sections, including entertainment, politics, media, living, style and green. The site also started its first local version, HuffPost Chicago. This year, The Huffington Post received widespread attention for its original reporting on the 2008 presidential race, including the coverage provided by its OffTheBus team of citizen journalists. HuffPost currently has 46 employees.

Harman joins The Huffington Post board of directors, whose members include: Eric Hippeau, Managing Partner of Softbank Capital, Arianna Huffington, Kenneth Lerer and Betsy Morgan.

Yahoo Shareholder Vote Number-Crunching–Whither Cap Re's No Vote?

Kara Swisher — Mon, 04 Aug 2008 21:39:26 +0000

There is a mini-tempest brewing over how shares were tallied in the Yahoo annual meeting last Friday, specifically around whether a group of votes withheld by one of Yahoo’s major shareholders was not counted, counted incorrectly or even voted incorrectly by the investor.

According to sources close to the thinking at Capital Research & Management, the proxy committees for its two large funds that hold a significant stake in Yahoo (YHOO) recommended last week that they withhold votes specifically from CEO Jerry Yang and from various board members, such as Chairman Roy Bostock, to register disappointment with their performance.

Thus, the investment fund confirmed it had approached outside vote tabulator Broadridge Financial Solutions, a Lake Success, N.Y.-based financial services company that does securities clearing and processing, to investigate whether those votes were correctly counted on behalf of its Capital Research Global Investors fund.

Capital Research Global Investors–one of two funds separately managed at Capital Research & Management–owns 6.5 percent of Yahoo, according to recent filings, and Capital World Investors owns 9.8 percent.

Capital Research Global Investors’ investor Gordon Crawford has been vocal about his disappointment with Yang and the board at Yahoo.

And sources close to the fund’s thinking said Crawford recommended that it withhold votes from Yang and some other board members.

Capital World Investors has been less critical of Yahoo, but sources said it was also leaning toward voting at least some of its stake against the company’s leadership.

But Yang, for example, only had 14.6 percent withheld, with 85.4 percent voting for him. Bostock fared worse, grabbing only 79.5 percent of the yes vote, with 20.5 percent withheld.

That would mean, assuming a large part of Capital Research’s votes to withhold were counted, that only a few other investors voted against Yahoo.

This is highly unusual in a year when many shareholders have been deeply unhappy with its management.

But, in fact, overall results for both Yang and Bostock were actually better than last year.

I called Broadridge for comment and am awaiting a response.

Yahoo does not do its own tabulation, which must be done by a third party, although it has hired MacKenzie Partners as a proxy solicitor to manage the process.

Said a spokesman in response to my inquiry about the situation:

“The independent inspector of elections certified the results of the election and Yahoo! accurately announced those results. Yahoo! did not participate in the execution of the votes and was not a party to any errors which may have been made either by a voting institution or a proxy processing intermediary acting on behalf of banks, brokers and institutions.”

While the recommendations of the proxy committees at Capital Research are apparently not binding on some individual directors of smaller funds that make up the larger ones, they typically follow along with the overall decision from the top.

They might not have in this case, of course, or they might not have voted the shares at all, although it is also possible they could have voted incorrectly or that the votes were not tallied properly.

This is better than a hanging chad!

Another unusual issue around the voting: The amazing drop in the number of shares that were voted at all.

In 2008’s shareholder tally (see below for individual director numbers), only 75.8 percent, or 1,046,095,584 out of 1,381,008,701 possible share votes, were cast.

There were 1,205,435,371 votes cast in 2007 and 1,276,175,601 in 2006, a much higher percentage of overall votes.

Sources at Yahoo speculated that this could be due to the fact that most investors vote automatically in an uncontested election and were waiting for an outcome in the proxy fight between activist investor Carl Icahn and Yahoo.

After that issue was settled right before the annual meeting, though, some investors might not have even bothered to vote.

More to come, but here are the pertinent stats on the Yahoo vote as of Friday:

Roy J. Bostock (Shares for: 832,023,657/79.5 %; Shares Withheld: 214,071,927/20.5%)

Ronald W. Burkle (849,373,291/81.2%; 196,722,293/18.8%)

Eric Hippeau (948,862,579/90.7%; 97,233,005/9.3%)

Vyomesh Joshi (971,594,650/92.9%; 74,500,934/7.1%)

Arthur H. Kern (814,871,925/77.9%; 231,223,659 /22.1%)

Robert A. Kotick (967,044,818; 92.4%; 79,050,766/7.6%)

Mary Agnes Wilderotter (964,939,727/92.2%; 81,155,857/7.8%)

Gary L. Wilson (856,006,576/81.8%; 190,089,008/18.2%)

Jerry Yang (893,055,602/85.4%; 153,039,982/14.6%)

Doing the Math: Who Won in the Yahoo-Icahn Truce?

Kara Swisher — Tue, 22 Jul 2008 01:31:13 +0000

A source close to Yahoo’s thinking emailed and declared that BoomTown was misinformed and ignorant of the insider mechanics of the high-level corporate wrangling when I suggested in a post earlier today that the settlement between Yahoo and Carl Icahn was perhaps not the time to break out the bubbly.

You know, because Yahoo’s (YHOO) stock is still moribund, morale is still low, Microsoft (MSFT) is still looming and the economy is still tanking.

Other than that, Yahoo sources wanted to let me know the Icahn truce was a win.

And that is absolutely true, technically speaking.

One source told me, for example, that Icahn was going to go to a short slate (four of nine), and once he went to a short slate, it was highly possible that shareholders would have put on a few members of his choice anyway.

In other words, if I can manage the onerous math involved: Three or four of nine board seats Icahn might have gotten if the proxy fight went forward would have been a lot worse than three of 11 seats that the activist investor actually got in the deal.

Plus, added another source, Yahoo has consent over two of Icahn’s board choices, one of which will likely be former AOL (TWX) head Jon Miller, an experienced Web exec who is favorably looked upon by Yahoo CEO Jerry Yang.

Yahoo certainly had the wind at its back after Legg Mason Capital Management’s (LM) Blll Miller said he was backing current management last week, so Icahn probably blinked and took a bird in the hand now.

As to Yahoo, cashing in now rather than gambling makes sense. I see exactly why the company made this move–it ensured a certain outcome, as annoying as it doubtlessly is to have to seat Icahn at Yahoo’s board table.

(Also, who gets to sit next to him? I vote for the always jovial Eric Hippeau!)

So, cashing in now and avoiding a fight makes sense for both sides, I hereby admit.

Except, well, that the man that Yahoo quite correctly was characterizing as a technology nincompoop just days ago will be sitting on its board.

Icahn is still not qualified to be on the board and will also probably be an unhelpful, disruptive influence.

In addition, while three out of 11 is better than three or four out of nine, Yahoo might have done better in the proxy fight.

More importantly, in fighting, Yahoo leadership would have shown it was resisting the snake oil solutions that Icahn has been peddling, which essentially boils down to selling all or part of Yahoo off to Microsoft so that Icahn can get back his underwater investment.

Doing a deal with Microsoft might be a good idea, actually, but Yahoo has not been able to make a truly rational decision about what its focus should be, due to all the noise and pressure and, yes, the press scrutiny, of every one of its moves.

Now with Icahn, who can be very persuasive, incessantly poking away from within, I think he will probably not let up and definitely not be the kind of influence Yahoo needs.

Given my math-impaired mind, I could be wrong, of course.

With fewer seats going to its nemesis, Yahoo is right when it says that Icahn, who was inevitable, will not be as much of a drag as he could have been. Unfortunately, he will still be a drag, however.

Kara Visits AlwaysOn's Venture Summit East!

Kara Swisher — Wed, 09 Apr 2008 07:05:46 +0000

Yesterday, I moderated a panel at AlwaysOn’s Venture Summit East in Boston, called “Is There Still Upside in the Internet?”

Short answer: Always and forever, as long as there are venture capitalists with bags of other people’s money and enough rat holes to shove the cash down!

In all seriousness, it was a great discussion, centering on the lack of exit for start-ups via IPO, the slowing down of the M&A scene and a need to build businesses that have strong revenue outlooks.

As to hype? Social networking, of course! And underhyped? Mobile.

The panelists included: David Kidder, CEO, Clickable; Waikit Lau, Co-Founder, ScanScout; Bob Davis, General Partner, Highland Capital Partners; David Beisel, VP, Venrock; and, one of my personal favorite VCs and charmingest Yahoo (YHOO) board member, Eric Hippeau, Managing Director, Softbank Capital.

I gave Hippeau a teeny hard time about the MicroHoo situation (essentially, WTF!!?). He deftly ignored me and made the most salient point of the panel about the continuing transformative power of the Web.

(Thus, shaming me for my tiny-minded, here-and-now focus! Well, I was only ashamed just for a second, but it was a really long second!)

Here’s the video with interviews with Hippeau and others, including conference organizer Tony Perkins:

[ See post to watch video ]

Say Hello to the Yahoo Board Members

Kara Swisher — Mon, 28 Jan 2008 08:58:05 +0000

One of the most overlooked parts of Web companies are their board members, so I think it is time to start looking more carefully at those firms where the role of directors is going to be increasingly important in 2008.

First stop, obviously, is Yahoo, which reports its fourth quarter and also full-year earnings (and also perhaps some board-approved layoffs) tomorrow after the markets close.

With everything from consistently persistent takeover rumors, a still-lagging stock price and continued scrutiny on its moves to revive itself, the company’s managers and–it must be assumed–its directors obviously face challenges in the year ahead.

They certainly seem to be a pretty experienced group, with just the right kind of expertise in retail, telecommunications, engineering and entertainment.

Curiously, with all the noise around Yahoo, this has been a circumspect bunch and it’s not clear how much influence this group is exerting over management or how willing it is to roll up its sleeves and get into it.

Still, board members are supposed to be where the buck actually does stop, so, as a BoomTown public service, here’s a little primer of who’s who on the Yahoo BOD, so you know who is actually in charge (and, of course, who is to blame):

First among equals is obviously Yahoo CEO and Co-Founder Jerry Yang, who needs no introduction. Born in Taiwan and raised in San Jose, Calif., he has been trying to bring back the company he founded with David Filo since taking over the top slot at Yahoo last June. The obviously iconic figure within the company, he occupies the hottest seat of all. Some think his leadership has not been nearly bold enough, while others think his steadier approach to Yahoo’s revival is just what the company has needed.

Terry Semel served as Yahoo CEO from 2001 to 2007. After he left that job when the company’s troubles became more pronounced (to be fair, Semel did do a great job getting Yahoo back from its last brink when the first bubble popped), the former Hollywood mogul kept his title as chairman. He is also on the board of Polo Ralph Lauren, as well as many arts and cultural organizations. Recently, Semel revived his Los Angeles-based new media investment firm, Windsor Media, and rumors abound to his intentions–including possibly making a play for a Hollywood studio. Big question: Will Semel continue as chairman of Yahoo in 2008?

What to make of Roy Bostock, who has been on Yahoo’s board since 2003? I’ll tell you what: If Semel were to step down as chairman, the chatter is that the former top-level advertising exec (chairman and chief executive officer of D’Arcy Masius Benton & Bowles) is best suited to the job, given the importance of Yahoo’s ad business. Bostock also serves now has chairman of Northwest Airlines and is on the board of Morgan Stanley and is a principal at Sealedge Investments LLC.

Ron Burkle, founder and managing partner of the Yucaipa Companies, a private investment firm, has been a director since 2001. The high-profile Burkle, of course, is better known for being best billionaire buddy of Bill Clinton (and big fundraiser for Hillary Clinton). He is a curious choice to be on the board, although he is said to add an interesting perspective and also has obvious experience in retail and distribution (largely in the supermarket industry). He is also on the boards of Occidental Petroleum and KB Home.

Vyomesh Joshi joined the Yahoo board in 2005. He probably brings a good consumer product perspective to the company from his perch as executive vice president of the Imaging and Printing Group at Hewlett Packard, a $26 billion business with an operating profit of $3.8 billion, which is a whole lot of the kind of ink Yahoo needs. The longtime HP exec also has responsibilities in the entertainment arena for HP, which should be a boon to Yahoo.

The same goes for Robert Kotick, the chairman and CEO of games maker Activision, which recently merged with Vivendi’s Blizzard Entertainment unit, to create one of the biggest gaming companies in the world. Yahoo could use a little Guitar Hero buzz that Kotick’s company has gotten from the third version of the popular interactive game, a big holiday success, and also Blizzard’s World of Warcraft.

The other Northwest Airlines link is its Chairman Emeritus Gary Wilson, who has been on the Yahoo board since 2001. Wilson, who is also on the board of CB Richard Ellis, has an extensive financial background, working as the top numbers guys at places like Walt Disney (where he was a longtime board member) and Marriott. But can he lend his expertise to make the numbers work better at Yahoo?

The only woman director, Maggie Wilderotter, joined last July and serves as the chairman and CEO of Citizens Communications, which is an independent provider of telecommunications services. That background is important for Yahoo, but perhaps more important is her experience as a SVP at Microsoft (rumored to be the main company interested in acquiring Yahoo). Wilderotter has also been president and CEO of Wink Communications and has held a number of jobs at AT&T, and serves on the board of Xerox and the Tribune Company.

Eric Hippeau, managing partner at Softbank Capital Partners, is one of the two granddaddy Yahoo board members (along with Arthur Kern), having served as a director since 1996. Before Softbank, he was chairman and CEO of Ziff-Davis in its heyday. Hippeau is also on the board of Starwood Hotels and Resorts Worldwide.

Arthur Kern has also been on the Yahoo board since 1996. Kern made his fortune selling off American Media, an owner of radio stations, which he co-founded and ran. Kern now invests in marketing and media companies. (BoomTown, with great regret, has never met him after all these years–lazy, lazy BoomTown! And everyone says how nice he is. Lunch, Arthur?)

Ed Kozel, the CEO of the start-up Skyrider (a P2P search engine), is perhaps the most experienced technologist on Yahoo’s board and another key member of the board, say many, where he has served since 2000. He’s been a VC (Open Range Ventures), a consultant (Integrated Finance) and also was a longtime Cisco exec (he was CTO and SVP of business development there) and board member. He’s also been on the board of Reuters and is a director for Network Appliance.