Facebook’s imminent IPO might mint a mess of millionaires in Silicon Valley by Friday, but in the meantime, it’s driving wealth in a few newly public Internet companies, as well.

With the social networking company’s offering reportedly oversubscribed, some investors are looking for ancillary ways to profit from it, and seem to be turning to Facebook’s already public social networking peers.

As Arvind Bhatia, a financial analyst who covers Facebook for Sterne Agee, observed: “I do sense some ‘temporary’ momentum for these related social media stocks.”

Consider: Shares of LinkedIn, Zynga, Pandora, and Yelp have all been trading up in advance of Facebook’s IPO. On Wednesday, LinkedIn closed at $113.49; on May 1, it was trading around $106. Pandora shares ended Wednesday at $11.37, having closed at $8.56 on May 1. More recently, shares in Yelp — which had been slipping lower in value — saw a sudden uptick around May 11.

It’s the same thing with Zynga, which accounts for about 15 percent of Facebook’s revenue. While its stock has been down 25 percent in the last month, it’s been up 2.75 percent in the last five days.

Also on the upswing: RenRen, the so called “Facebook of China,” whose shares were up more than 7 percent Tuesday.

You could add Groupon to this list, as well — although much of the recent upswing in its share price is likely due to the company’s strong first-quarter results that beat Wall Street expectations.

Coincidence? Hardly.

More likely, these stocks are all benefiting from the halo of interest surrounding Facebook’s IPO, an offering that may well prove to be the biggest-ever in the Internet space. Investor drive for a piece of Facebook is becoming the drive for a piece of a company like Facebook or, better yet, one that might be acquired by it.

“LinkedIn, Zynga, Pandora, Yelp … these are all potential acquisition bait for Facebook,” Ironfire Capital founder Eric Jackson told AllThingsD. “If Facebook is going to trade at a premium — like $150 billion to $200 billion, why not buy the fish and the bait, too?”

But this is all pre-IPO chatter. What happens on Friday, and the Monday following — and in the months to come — will provide a hard-and-fast answer to the question of whether the Facebook halo has any true longevity.

If Facebook’s IPO delivers the gains investors expect, sentiment toward the social media stocks may well continue to improve, making the decision to “buy bait” the past few days a wise one indeed.

Said GreenCrest Capital analyst Max Wolff: “By Friday mid-morning Facebook will be the anchor in a sector with several names, a diversity of stories and well over $130 billion in market capitalization.”

If RIM’s layoffs addressed any of the concerns orbiting the company, the market didn’t show it. Perhaps that’s because three-quarters of the 2,000 jobs eliminated were created in the past six months. As Ironfire Capital founder Eric Jackson notes, RIM ended its fourth quarter in February with 17,500 employees. If the 2,000 layoffs the company announced Monday dropped its headcount to 17,000, then 1,500 of them were essentially new hires brought on board during the company’s precipitous decline.

Says Jackson, “In other words, that 11 percent workforce reduction is really just a 2.8 percent reduction of RIM’s pre-February workforce levels.”

Sacking 2,000 employees isn’t so much a sign of RIM coming to terms with the grim reality it faces as it is an indication of just how scattered its leadership is. These layoffs read more like the correction of a staffing error than they do a decisive move to push RIM toward a rebound. And really, they do nothing to address the long-term issues that have folks so worried about the future of the company. Cutting expenses in the face of declining revenue is a wise move, but it doesn’t make RIM’s handsets any more compelling, its strategy any more cogent or its leadership any more reliable.

As I wrote earlier this year, “RIM’s hopeless downward spiral is the result of missteps and flaws that go way beyond its inability to meet guidance. RIM has failed to innovate. It has failed to execute. It has failed to understand the consumer market, which is increasingly informing enterprise support and purchasing decisions. And its comedy-of-errors management has consistently refused to take responsibility for those failures, because it doesn’t seem to see them as a problem.”

And if you think that’s a bit too harsh, or unfair, consider this: In 2008 RIM was an $83 billion company. Its market cap as of market close Monday: $13.98 billion.

Yahoo — which turned in yet another disappointing second quarter on Tuesday, but with all new excuses for the continuing decline in revenue — is now getting toasted by Wall Street.

That would be the marshmallow — and not the champagne — kind.

The stock of the Internet giant dropped below $14 a share, to close at $13.48 yesterday, after the company said its display advertising business in the U.S. was hard hit.

Today, it’s already down even further.

That’s close to an eight percent haircut for the past two days and a decline of 20 percent for the past three months.

In that same three months, Google is up over 13 percent, Microsoft is up over five percent, Amazon is up over 17 percent and Apple is up 13 percent.

You get the general idea here.

The decline means Yahoo’s market value is now only $17.5 billion, and more than two-thirds of that value is accounted for by its Asian assets (more than $9 billion) and cash ($3.3 billion).

That means its other properties are worth just above $5 billion now.

And while CEO Carol Bartz tried again — in a conference call with analysts after the earnings were released — to portray the situation as another part of her never-ending turnaround of the company, the issues at Yahoo are not new.

They range from display weakness to search declines to a talent drain to ineffective marketing to the lack of a consistent and fast-developing pipeline of innovative products to its flaccid board.

The earnings mess — no surprise, given estimates going forward were also missed — was seized on by investors and the press. (See, it’s not only me!)

In a column earlier this week in Forbes, titled “Carol Bartz’s 8 Blind Spots That Sunk Yahoo,” longtime and noisy Yahoo critic Eric Jackson noted:

“[T]he Bartz hiring is a cautionary tale to all boards and investors: An over-confident ex-CEO with no industry experience can make a bad company worse before things get better.”

But perhaps more damaging was a post today in The Wall Street Journal’s Heard It on the Street column by Martin Peers, titled: “Yahoo’s Unsurprising Surprise.”

It began with the cutting line: “Talk about having a credibility gap on display.”

Then it got worse:

“Admittedly, it may be that Yahoo has dropped off the radar screens of so many investors that this latest episode can’t do further damage. Certainly, aside from cutting costs, Ms. Bartz’s turnaround plan for Yahoo remains stillborn.”

That might be too kind if the stock continues to decline, a development that — in turn — might once again begin the speculation of Yahoo as a takeover target.

Which, if that could manage to get Yahoo shares back up, might be a reason to break out the bubbly.

A Yahoo spokeswoman declined to comment, which — given stock prices are what they are — is probably a good idea.

That’s the vision for CapLinked Inc., a new start-up that wants to be the go-to place for setting up and closing deals, as well as managing portfolio companies after the close.

The company has raised $525,000 in angel funding from Peter Thiel, Dave McClure’s 500 Startups; Joe Lonsdale, co-founder of Palantir Technologies; Aman Verjee, chief financial officer at Sonos; and David Anderson, managing partner of 7th Rig. CapLinked previously raised about $400,000 in a financing from individuals in 2010.

CapLinked co-founder and Chief Executive Eric Jackson is a former vice president of marketing at PayPal Inc. and knows investors Thiel, McClure, Lonsdale and Verjee, all formerly of PayPal.

Read the rest of this post on the original site

But Yahoo’s not languishing–or so it says.

At the company’s “Fall Product Runway” media event this morning, Yahoo announced plans for a slew of forthcoming updates to what it’s taken to paranoically describing as “habit-forming communications products.” Among them:

• Yahoo Mail Beta, the latest iteration of the company’s mail service. With a cleaner UI and updated back end, it promises to be faster and easier to use. Integrated support for Twitter and Facebook will allow users to manage at least a few of their social services directly from their in-boxes. Also included: Video, photo sharing tools, a new version of Yahoo Messenger and better spam tools (Yahoo claims its mail service will have 55 percent less spam than Gmail).

• Yahoo Search enhancements that promise “more visually compelling” news and entertainment-related searches that combine images, news articles, videos, tweets, events and ratings in search returns.

• Trending Now lists–trending stories presented as slideshows

• A Yahoo app for iPad designed to deliver a personalized Yahoo experience to Apple’s (APPL) tablet. Features Yahoo News, Mail, etc., as well as a handy Yahoo alarm clock.

• Rich content integration with Twitter.

• An improved Connected TV experience, thanks to new partnerships with content providers, social networks and TV manufacturers like Toshiba.

• Customized Content Ads: “Creative formats that leverage an advertiser’s robust content and enable social sharing”–whatever that means.

Interesting updates, I suppose, when they’re finally rolled out (Yahoo EVP Blake Irving says we won’t be able to use Twitter to comment on Yahoo pages until June 2011,), but nothing really transformative. Many of them seem to me table stakes really, and to tout them before they’re even live and so soon after the debut of Google (GOOG) Instant smells a little desperate. Odd that one of Irving’s big messages today is that Yahoo is becoming faster and more innovative and will be shipping products even more quickly than it has been. None of these products are even ready.

A parting shot: Asked “What is Yahoo?” during today’s Q&A session, Irving defined the company as follows:

“Yahoo is a global series of Web experiences delivered across a variety of devices that gives people what they want. It connects advertisers to a global audience. Yahoo is all about delivering experiences to individuals that make them engage with each other. Folks always ask, Is Yahoo a search company? A content company? A communications company? In a world where people only have so much time, we’d like to help them engage with the things that matter most to them.”

That’s got to be the world’s worst elevator pitch.

And this is certainly a good time to buy. “To be successful in the long run, Microsoft needs people to green-light the best acquisitions and teams of people with the right skill sets to integrate them,” Jackson writes. “Frankly, Microsoft hasn’t shown it has either of those abilities. Microsoft investors don’t need another expensive aQuantive deal or Facebook investment that smacks of desperation and has questionable long-term value for the company’s shareholders. It needs to take a page out of IBM’s and Oracle’s playbook, though, and start doing deals to grow its top and bottom lines. A big debt issuance, with a skilled acquisition team, and evidence of some exciting growth-related deals could suddenly show the market that this elephant can dance again.”

Marked by panic selling and wet-your-pants fear, it was one of the worst weeks in the financial world’s history–a week that cut the legs out from under Google (GOOG), beat Yahoo until its market cap bled purple and caused the Dow Jones Industrial Average to swing more than one thousand points on an intra-day basis.

It was a week that saw Sequoia Capital warn its portfolio companies to prepare for a protracted downturn or, in the words of partner Michael Moritz, be “spattered on windshields and radiator grills and be forgotten.” Turns out Bubble 2.0 sounds a lot like Bubble 1.0 when it pops.

Beneath the screams of agony echoing across Wall Street, there was other news worth noting:

• Advanced Micro Devices (AMD) announced plans to spin off its manufacturing operations.
• “Legal” turned out to be a poor choice of adjectives for RealNetworks’ RealDVD (RNWK), the company’s new “legal” DVD ripper. A judge extended the temporary restraining order barring the company from distributing it.
• This just in: Time Warner’s (TWX) AOL and Yahoo (YHOO) are still talking about a merger and Generalissimo Francisco Franco is still dead.
  Where is Microsoft (MSFT) in all this? Sitting on the sidelines hoping the deal will go through.
• Finally, activist investor Eric Jackson, the creator of the Yahoo! Plan B investor community, revealed Yahoo! Plan C: his hedge fund’s divestiture of its Yahoo stake.

“I sold my YHOO stake, which I held through my hedge fund last month when it hit $20,” Jackson told Digital Daily. “I still own a small amount personally. I had no idea idea it would fall this much but I finally decided to stop pushing a rope by calling for change from the inside [as a shareholder]. I voted with my feet. This board has the blood of its shareholders on its hands, and I hope they wear that scarlet letter stigma for a long time.”

Asked to comment on Mithras Capital Partners proposal that Yahoo (YHOO) sell itself to Microsoft (MSFT) for $22 a share, Jackson had this to say: “If I was in Redmond, I’d say why not wait a few weeks and pick this company up for a couple of bucks?”  

“I sold my YHOO stake, which I held through my hedge fund last month when it hit $20,” Jackson told Digital Daily. “I still own a small amount personally. I had no idea idea it would fall this much but I finally decided to stop pushing a rope by calling for change from the inside [as a shareholder]. I voted with my feet. This board has the blood of its shareholders on its hands, and I hope they wear that scarlet letter stigma for a long time.”

Asked to comment on Mithras Capital Partners proposal that Yahoo (YHOO) sell itself to Microsoft (MSFT) for $22 a share, Jackson had this to say: “If I was in Redmond, I’d say why not wait a few weeks and pick this company up for a couple of bucks?”  

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) Why did Yahoo sell Overture Japan (a $396 million-per-year business) to Yahoo Japan for $13 million last August? Did Yang, who sits on Yahoo Japan’s board, recuse himself from the negotiations? Who negotiated on behalf of Yahoo and why did they agree to such a low price when Yahoo has a habit of paying three to five times revenues for companies like Zimbra, BlueLithium and Right Media?

(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.

]]> http://allthingsd.com/20080806/jackson/feed/ 0 http://allthingsd.com/20080804/kara-visits-the-yahoo-annual-meeting/ http://allthingsd.com/20080804/kara-visits-the-yahoo-annual-meeting/#comments Mon, 04 Aug 2008 07:01:03 +0000 Kara Swisher http://kara.allthingsd.com/?p=2488

BoomTown was blogging so manically from the Yahoo annual meeting, which took place in San Jose on Friday, I plum forgot to load up the video I did there.

No video was allowed inside the meeting or anywhere near it, by the way. So rather than getting beaten senseless by the squads of purple-clad Yahoo (YHOO) minions of CEO Jerry Yang, I decided to pocket my Flip camera for part of it.

But, afterwards, I did a very interesting interview with shareholder activist Eric Jackson, who has been beating on Yahoo for awhile.

To no avail, for now. As it turned out, Yang and the Yahoo board sailed out of the meeting pretty much intact, despite all the hubbub of this past year, from the company’s weakened performance to the full-frontal bid attack by Microsoft (MSFT).

Here is the video (and apologies for saying “board” meeting in several places in the video, rather than “annual” meeting):


[ See post to watch video ]

Also, here are my liveblogging posts from the meeting, in time order:

BoomTown Liveblogging From Yahoo Annual Meeting in San Jose!

Liveblogging From Yahoo Annual Meeting: Empty Chairs and No Power

Liveblogging From Yahoo Annual Meeting: Tim Koogle Returns!

Liveblogging From Yahoo Annual Meeting: Bostock Defends Microsoft Dealmaking (Or Lack Thereof)

Liveblogging From Yahoo Annual Meeting: Yangtastic!

Liveblogging From Yahoo Annual Meeting: Shareholder Q&A!

Yahoo Shareholder Vote: Old Board Stays Put (While AOL Makes Another Boneheaded Move!)

]]> http://allthingsd.com/20080804/kara-visits-the-yahoo-annual-meeting/feed/ 0 http://allthingsd.com/20080801/liveblogging-from-yahoo-annual-meeting-shareholder-qa/ http://allthingsd.com/20080801/liveblogging-from-yahoo-annual-meeting-shareholder-qa/#comments Fri, 01 Aug 2008 18:42:21 +0000 Kara Swisher http://kara.allthingsd.com/?p=2475

OK, now we’re cooking with gas at Yahoo’s annual meeting in San Jose, as various shareholders–mostly small ones–come to the microphones to give Yahoo a piece of their mind.

The room has filled up more, about one-third to one-half full, with the top Yahoo (YHOO) leadership arrayed at a table up front like an Italian wedding.

First up, longtime Yahoo activist shareholder Eric Jackson asked Yahoo Chairman Roy Bostock to step down, noted that Yahoo had overplayed its hand with the Microsoft bid, wondered about Yahoo President Sue Decker’s time problems (too many outside boards) and questioned the worth of Yahoo’s deal to sell an asset in Japan.

Yahoo, of course, did not agree with Jackson! At all!

“No,” said Bostock about stepping down, also noting that he was woefully underpaid for his board service, given all the activity over the last year related to Microsoft (MSFT).

Next up, a shareholder asked about Yahoo’s poor performance compared to Google (GOOG).

Yang’s answer: We’re trying!

Next, a shareholder supported Yang, noting that Yang did co-found the company. But then he kind of suggested Yang perhaps leave the company for a “cathartic” time.

The same shareholder also compared Bostock’s defense of Yahoo’s behavior with “a girlfriend who is trying to convince the world that she initiated the breakup.”

That made Yang smile.

Later, Bostock added: “I would not compare Yahoo’s relationship to Microsoft to a romantic one.”

The next question was related to China and Yahoo’s thorny history there. Yang had addressed the issue earlier and added that the company was working hard to improve its efforts related to human rights.

While one former employee and shareholder called Yahoo “rude” not to entertain more questions from investors, another shareholder called Microsoft “a green-tentacled monster,” I think, which provoked laughs and clapping.

A question was then asked about advertising and competing with Google-owned DoubleClick. Decker noted that Yahoo’s Web-based approach is better.

One shareholder noted the lack of women on the board (there is one), and a shareholder justifiably complained that only one-third of the directors did not show up and also not enough of the board owns stock, such as Ron Burkle (who was apparently in Europe at another commitment.)

Perhaps of everything that went on at the annual meeting, which was mostly nothing, perhaps that was the most salient point of all.

]]> http://allthingsd.com/20080801/liveblogging-from-yahoo-annual-meeting-shareholder-qa/feed/ 0 http://allthingsd.com/20080616/icahnt-has-yahoo/ http://allthingsd.com/20080616/icahnt-has-yahoo/#comments Mon, 16 Jun 2008 12:18:50 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=2539 Carl Icahn has finally broken his silence. The outspoken billionaire investor, who’s been oddly quiet since Yahoo (YHOO) announced its advertising partnership with Google (GOOG), finally commented on the deal this morning, saying it “might have some merit.”

In a brief interview with Reuters, Icahn seemed oddly reserved for someone who, up until last week, had always been ready with an unkind word and an outstretched middle finger for Yahoo and its fumbling leadership. Apparently, holding 59 million shares in a company that’s somehow managed to undermine a merger deal with Microsoft (MSFT) that would have valued it at up to $47.5 billion has taken some of the spring out of his step. “While the Google deal is not the same as an offer of $34.375 per share for Yahoo, I am continuing to study it, and it might have some merit,” Icahn said. “I continue to be extremely disappointed with the Yahoo management, but the Google deal might have some merit and seems to be better than the alternative deal proposed by Microsoft.”

Icahn offered no comment on the future of his proxy fight for the company’s board, though one would imagine he must be having some second thoughts about it now that Microsoft has thrown up its hands in disgust and has apparently walked away from the negotiating table for good. And the “change of control” provisions that allow Google or Yahoo to terminate the partnership they’ve just inked in the event that a majority of Yahoo’s board is replaced at its upcoming annual shareholders meeting in August can’t be sitting well with him either.

But not to worry, dissident Yahoo investor Eric Jackson has a plan that may right the company and prevent its current proprietors from driving down its value once again. He’s urging fellow shareholders to vote for a board slate that includes four directors proposed by fellow activist Carl Icahn and five from Yahoo. “I want Icahn to win outright, but I am putting forward this ‘third option’ because I fear several large investors will worry about the operational abilities of Icahn and his team,” Jackson wrote in an essay entitled “Third Option for Yahoo.”

So who would Jackson like to see elected to Yahoo’s board? From Icahn’s slate he recommends Adam Dell, Lucian Bebchuk, John Chapple and Edward Meyer. And from Yahoo’s existing board Vyomesh Joshi, Robert Kotick, Maggie Wilderotter, Gary Wilson and Jerry Yang.

Jerry Yang? Really?

“Although I have been disappointed with the results of Jerry Yang’s tenure as CEO and hold him accountable for the poor outcome with Microsoft, I believe that–as a co-founder–he should remain on this board,” Jackson explained. “Whether or not he remains as CEO is something for the new board to determine. I frankly hold Mr. Bostock [Yahoo Chairman Roy Bostock] more responsible for the breakdown in talks with Microsoft. He supposedly has much more experience in such deal-making matters than Yang, and I find it puzzling that he would choose not to attend that fateful May 3 meeting in Seattle, which led to Microsoft finally pulling the plug on their offer.”

]]> http://allthingsd.com/20080616/icahnt-has-yahoo/feed/ 0 http://allthingsd.com/20080616/icahnt-has-yahoo-2/ http://allthingsd.com/20080616/icahnt-has-yahoo-2/#comments Mon, 16 Jun 2008 12:18:50 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=2539 Carl Icahn has finally broken his silence. The outspoken billionaire investor, who’s been oddly quiet since Yahoo (YHOO) announced its advertising partnership with Google (GOOG), finally commented on the deal this morning, saying it “might have some merit.”

In a brief interview with Reuters, Icahn seemed oddly reserved for someone who, up until last week, had always been ready with an unkind word and an outstretched middle finger for Yahoo and its fumbling leadership. Apparently, holding 59 million shares in a company that’s somehow managed to undermine a merger deal with Microsoft (MSFT) that would have valued it at up to $47.5 billion has taken some of the spring out of his step. “While the Google deal is not the same as an offer of $34.375 per share for Yahoo, I am continuing to study it, and it might have some merit,” Icahn said. “I continue to be extremely disappointed with the Yahoo management, but the Google deal might have some merit and seems to be better than the alternative deal proposed by Microsoft.”

Icahn offered no comment on the future of his proxy fight for the company’s board, though one would imagine he must be having some second thoughts about it now that Microsoft has thrown up its hands in disgust and has apparently walked away from the negotiating table for good. And the “change of control” provisions that allow Google or Yahoo to terminate the partnership they’ve just inked in the event that a majority of Yahoo’s board is replaced at its upcoming annual shareholders meeting in August can’t be sitting well with him either.

But not to worry, dissident Yahoo investor Eric Jackson has a plan that may right the company and prevent its current proprietors from driving down its value once again. He’s urging fellow shareholders to vote for a board slate that includes four directors proposed by fellow activist Carl Icahn and five from Yahoo. “I want Icahn to win outright, but I am putting forward this ‘third option’ because I fear several large investors will worry about the operational abilities of Icahn and his team,” Jackson wrote in an essay entitled “Third Option for Yahoo.”

So who would Jackson like to see elected to Yahoo’s board? From Icahn’s slate he recommends Adam Dell, Lucian Bebchuk, John Chapple and Edward Meyer. And from Yahoo’s existing board Vyomesh Joshi, Robert Kotick, Maggie Wilderotter, Gary Wilson and Jerry Yang.

Jerry Yang? Really?

“Although I have been disappointed with the results of Jerry Yang’s tenure as CEO and hold him accountable for the poor outcome with Microsoft, I believe that–as a co-founder–he should remain on this board,” Jackson explained. “Whether or not he remains as CEO is something for the new board to determine. I frankly hold Mr. Bostock [Yahoo Chairman Roy Bostock] more responsible for the breakdown in talks with Microsoft. He supposedly has much more experience in such deal-making matters than Yang, and I find it puzzling that he would choose not to attend that fateful May 3 meeting in Seattle, which led to Microsoft finally pulling the plug on their offer.”

]]> http://allthingsd.com/20080616/icahnt-has-yahoo-2/feed/ 0 http://allthingsd.com/20080507/independence-day/ http://allthingsd.com/20080507/independence-day/#comments Wed, 07 May 2008 19:02:33 +0000 John Paczkowski http://digitaldaily.allthingsd.com/20080507/independence-day/ July 3 will be “Independence Day” for Yahoo (YHOO) shareholders (“Independence day. Heh. “Enjoy The Shareholder Meeting. It May Be Your Last …“). So says Eric Jackson, president of Ironfire Capital, who is doing his damnedest to recruit an alternate slate of directors to present at Yahoo’s annual meeting on that day.

“It’s hard to believe the board could let this happen,” Jackson told the Associated Press. “I think they completely misconstrued the situation and thought, ‘Microsoft is rich, so let’s soak them.’ They were bluffing all the way and got caught.”

If Jackson hopes to make good on his threat, he’d best get cracking. Shareholders have only 10 days from the announcement of Yahoo’s annual meeting to nominate directors and Yahoo did just that this past Monday. That means Jackson has until May 15 to pull his slate together. Perhaps he can just borrow Microsoft’s (MSFT) …

]]> http://allthingsd.com/20080507/independence-day/feed/ 0 http://allthingsd.com/20080507/independence-day-2/ http://allthingsd.com/20080507/independence-day-2/#comments Wed, 07 May 2008 19:02:33 +0000 John Paczkowski http://digitaldaily.allthingsd.com/20080507/independence-day/ July 3 will be “Independence Day” for Yahoo (YHOO) shareholders (“Independence day. Heh. “Enjoy The Shareholder Meeting. It May Be Your Last …“). So says Eric Jackson, president of Ironfire Capital, who is doing his damnedest to recruit an alternate slate of directors to present at Yahoo’s annual meeting on that day.

“It’s hard to believe the board could let this happen,” Jackson told the Associated Press. “I think they completely misconstrued the situation and thought, ‘Microsoft is rich, so let’s soak them.’ They were bluffing all the way and got caught.”

If Jackson hopes to make good on his threat, he’d best get cracking. Shareholders have only 10 days from the announcement of Yahoo’s annual meeting to nominate directors and Yahoo did just that this past Monday. That means Jackson has until May 15 to pull his slate together. Perhaps he can just borrow Microsoft’s (MSFT) …

]]> http://allthingsd.com/20080507/independence-day-2/feed/ 0 http://allthingsd.com/20080218/first-lets-toss-out-all-the-yahoo-board-members/ http://allthingsd.com/20080218/first-lets-toss-out-all-the-yahoo-board-members/#comments Mon, 18 Feb 2008 11:21:39 +0000 Kara Swisher http://kara.allthingsd.com/20080218/first-lets-toss-out-all-the-yahoo-board-members/ While Microsoft (MSFT) still has not moved against the board of Yahoo (YHOO), which is one of the many options open to it, some of its more vocal advocates have.

Eric Jackson–who made a very correct nuisance of himself at Yahoo’s annual meeting back in June of 2007 by loudly complaining of management’s weak performance directly to then-CEO Terry Semel and other execs, forming a grassroots shareholder group called “Yahoo! Plan B” and also posting his thoughts on a Web site called “Breakout Performance”–is back.

In an open letter on his site, Jackson takes aim again, this time at the Yahoo board with an online petition. “We believe that the Yahoo! board does not have the moral authority to represent our views as shareholders in discussions with Microsoft or any other company who wants to buy Yahoo!,” it reads. “Therefore, we will band together as a group and agree to sell our Yahoo! shares to the highest bidder. There is currently an offer on the table from Microsoft for $29 (at Microsoft’s current valuation). We view that as a floor bid. We will tender our shares to Microsoft or any other bidder (e.g., AT&T, NBC, News Corp., Comcast, etc.) who makes a better offer than this.”

Asking shareholders to sign an informal pledge, it went on: “If we remain isolated, disenfranchised shareholders (whether we are an individual owning one share or we are a large institutional investor owning thousands of shares), we are powerless to control how Yahoo!’s board acts in getting the best possible outcome for us. If we band together, we can control our own destiny.”

Jackson, who now runs an activist investment firm in Florida called Ironfire Capital, appears to have just over 2.1 million shares pledged (Jackson has 96 shares himself, which makes this all the more delicious).

Here’s a video he did and, below it, he appears in a post and video I did from that Yahoo annual meeting called “I Went to the Yahoo’s Annual Meeting and All I Got Were These Purple Balloons,” in which he appears (and is quite prescient, in fact, as is BoomTown at the end with our Yahoo-as-deflated-balloon prediction):


[ See post to watch video ]
]]> http://allthingsd.com/20080218/first-lets-toss-out-all-the-yahoo-board-members/feed/ 2 http://allthingsd.com/20070712/motorola-gets-yahooed/ http://allthingsd.com/20070712/motorola-gets-yahooed/#comments Thu, 12 Jul 2007 08:43:04 +0000 Kara Swisher http://kara.allthingsd.com/20070712/motorola-gets-yahooed/ Eric Jackson, the effectively noisy shareholder advocate who prodded Terry Semel to leave Yahoo as CEO at its annual board meeting just days before he did, is now targeting Motorola and its CEO Ed Zander.

While Jackson runs a small operation, he uses his Web site, YouTube videos, posting to wikis and other online tools in his effort to build a small group of disgruntled investors and offer a “Plan B.”

Zander, who appeared at our D3 conference, might want to be careful. Jackson craftily asked Semel at the Yahoo meeting–see my post on it here and the video from it below–whether he had the “fire in the belly” to continue as CEO at the troubled Internet giant. At the meeting, Semel answered with a hearty yes, but was gone soon after.

As of yesterday, Jackson now has a lot more fodder in his fight with the telecommunications-equipment maker, when Motorola warned of weak shipments of cellphones and said its mobile-devices division would lose money for the year.

With the stock in the tank, management turmoil, a lackluster product line and rumors of a Zander exit, let us not forget the recent explosive launch of the iPhone to cause even more agita at the company.

But let Jackson take it from here with his recent video on Motorola, followed by mine from the Yahoo board meeting in June:

]]> http://allthingsd.com/20070712/motorola-gets-yahooed/feed/ 0 http://allthingsd.com/20070612/yahoo-shareholders/ http://allthingsd.com/20070612/yahoo-shareholders/#comments Tue, 12 Jun 2007 22:22:52 +0000 John Paczkowski http://digitaldaily.allthingsd.com/20070612/yahoo-shareholders/ Well, what do you know: Yahoo’s annual shareholder meeting didn’t conclude with CEO Terry Semel’s head piked on the exclamation point of the Yahoo sign outside company headquarters. Nor did it end with the blackballing of the directors responsible for Semel’s grotesquely large pay package.

Despite complaints over Yahoo’s lousy performance and a widely publicized campaign to oust Semel and the majority of the company’s directors, the company’s shareholders rejected a plan to tie compensation for senior executives to the company’s performance and approved the company’s slate of directors.

That said, the meeting couldn’t have been an easy one for Semel or the board. Yahoo’s directors were approved by a roughly 66% vote. An endorsement, yes, but not a ringing one.

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