SAN JOSE, Calif.--The Yahoo shareholders meeting here has commenced and adjourned. And CEO Jerry Yang and his board did end up getting an earful about the company's share price and its handling of Microsoft's attempted acquisition.
I blogged live from the meeting. We heard presentations from Yang, Chairman Roy Bostock, President Sue Decker, and CFO Blake Jorgensen, and then questions from shareholders. Here is a record of the live blog.
9:59 a.m. PDT: Just before the meeting is set to begin, the Fairmont Hotel ballroom is more empty than full. Perhaps Yahoo planned this when investor and board-member-to-be Carl Icahn was still waging his proxy war and the company expected a a bigger crowd.
10:04 a.m. PDT: Bostock welcomes the crowd. "We are now under way." He introduces the board and thanks them for a lot of work during the recent turmoil generated by Microsoft's attempt to acquire Yahoo and other events. In the last six months, "We have had more than 30 meetings."
10:11 a.m. PDT: The voting mechanics are under way. This part would have been more exciting if Icahn had still been trying to take over the Yahoo board. His settlement with Yahoo means that he will get a seat on the board by Monday, replacing Robert Kotick, and then he and the other Yahoo board members will choose two new board members from Icahn's list of candidates. In other words, Icahn will have influence over the board, but not control.
10:22 a.m. PDT: We're hearing various shareholder proposals: a pay-for-performance initiative from the United Carpenters Pension Fund and an effort to stop political censorship. "We proposed Yahoo formally adopt a code of conduct in which the company would agree not to engage in proactive censorship," the representative of New York City's pension fund said. Also: a request from a board committee on human rights.
It's pretty rare for these sorts of proposals to make much headway, though.10:25 a.m. PDT:: John Harrington, CEO of Harrington Investments, in describing the human rights proposal he's backing, adds a little barb about the three Icahn board members soon to arrive. "I do hope Mr. Yang enjoys himself (with) the new board members. I call them the gang of three, because you all deserve one another," he said.
10:35 a.m. PDT:: The corporate presentations are beginning. Bostock tries to frame the talks the way the company wants them framed: "There's been a great deal of misunderstanding."
10:38 a.m. PDT: The Yahoo board has been working on righting the company since 2007, Bostock said, discussing a strategic plan in January. "We agreed at that point that 2008 would be an investment year," he said. "At every step in that process, the No. 1 priority was to maximize shareholder value."
10:45 a.m. PDT: Some emotion is creeping into Bostock's voice: he's sounding a little defensive already as he describes the Microsoft acquisition attempt's history: "At no point did the board or management in any way, despite rumors and speculation, ever resist Microsoft's proposal," Bostock said. "There was never any doubt...that the board was open to a deal with Microsoft and for search only if it made sense, but ultimately, there was never a compelling offer put on the table."
Bostock's tone softens as he discusses Icahn's arrival. "The board looks forward to that. Carl is a good guy, despite some of the things written about him. He'll be a very productive member."
10:49 a.m. PDT: Bostock sounds like he wants a little sympathy for the board and management. "It is a hell of a burden to deal with these kinds of offers in an effective and thorough way," and during that time the company met first- and second-quarter financial targets and stuck to its full-year guidance, he said.
10:53 a.m. PDT: Yang takes the stage, sticking to his optimistic script of Yahoo's opportunity.
"We're still very much in a growth business," he said, with 1.2 people on the Internet in 2007 growing to an estimated 1.5 billion in 2010.
"The Internet is the only industry that's growing in advertising revenue. We believe there's significant growth in the next three years, it's global, and it's a business Yahoo is very well positioned to be in."
10:56 a.m. PDT: Now here's the standard speech on Yahoo's two-part strategy: offer Internet users good starting points and be a must-buy site for Internet advertisers. "There's no other company on the Internet that has the audience and consumer franchise we have (and) the leadership we have in display advertising, and we are a major player in search, second only to Google," Yang said.
11 a.m. PDT: Yang doesn't exactly say good riddance to the managers who left the company in the last few weeks, but he does say this about the company's reorganization: "We have put in place some of our best talent running these product groups."
11:03 a.m. PDT: Decker is up now, explaining advertising 101: there are search ads next to search results, and display ads that run everywhere else. Yahoo is trying to make it easier for advertisers to deal with both varieties, which are bought, placed, paid for, and evaluated with very different methods.
11:05 a.m. PDT: Yahoo wants to bridge the divide between search and display. "Google is strong in search, AOL is strong in display, but there are really no companies that have the strength and scale in both," Decker said.
11:13 a.m. PDT: Decker touts Buzz and boasts that it's displaced Digg as the top way to find content across the entire Internet. Buzz feeds content to Yahoo's Web site in an attempt to help advertisers, users, and publishers. "With the home page, we are opening it up so we're surfacing the very best of the Web. Ultimately, advertisers will pay for that attention," Decker said.
11:15 a.m. PDT: Decker plugs for, which lets publishers spotlight search results with richer data. .
11:18 a.m. PDT: Just about every technology company these days loves the mobile market, but it's a royal pain to deal with given the variety of handsets, networks, and other technical and business obstacles. Decker is bullish overall: "Eight hundred million users potentially now can access our mobile services. Ultimately, mobile we think will be the leading starting point on the Web, based on how the world is evolving outside the U.S."
11:21 a.m. PDT: Rosy picture part four: CFO Blake Jorgensen is talking about company finances. In the worst economic conditions in more than 10 years, Yahoo's revenue and operating cash flow have been increasing, he said.
Jorgensen tries currying favor with the audience: "Maximizing shareholder value is the No. 1 goal of management and the No. 1 goal of the board."
11:25 a.m. PDT: We're headed into the question-and-answer period. It's only going to be 15 minutes long, so likely some folks won't get their turn at the microphone.
11:33 a.m. PDT: The fireworks begin. Eric Jackson, of Ironfire Capital, who represents a group with more than 3.2 million shares asks Bostock to step down. (Note: I initially reported this as a call for the whole board to step down, but it turned out to be a bit unclear.) Last year only 34 to 36 percent voted to keep Bostock as chairman, he said.
"I think you're overpaid in compensation, I think you overplayed your hand with Microsoft, and I think you've overstayed your welcome after last year's vote," he said.
He also gripes about Yahoo selling Overture Japan to Yahoo Japan for $13 million, on which Yang is a board member. Did Yang recuse himself from the discussions? The price Yahoo sold the asset for "seems far below market value considering Yahoo paid 3 to 5 times market value for RightMedia, Zimbra, BlueLithium and others."
Yang said he did recuse himself from the discussion, and Yahoo got a good price in part because Yahoo Japan is taking over a lot of the costs of the group, he said.
11:37 a.m. PDT: Uh-oh: there are nine more questioners lined up and we aren't done yet with part three of question one.
11:43 a.m. PDT: Bostock said this year's vote "is probably more relevant" than last year's, and he prefers to see 34 percent against as 66 percent for.
Regarding the comment about overplaying Yahoo's hand against Microsoft, Bostock said, "That's a mischaracterization, misunderstanding, and misconception of what happened."
11:53 a.m. PDT: A plea from a fantasy sports fan who owns Yahoo stock: "If you're trying to target men between ages of 15 and 35, it seems you have a competitive advantage over anyone else," so invest more. The audience chuckles.
He also thinks Bostock should just clam up already about the Microhoo saga. "You've got a situation where it sounds like the girlfriend in a breakup now trying to convince the world she was the initiator, not the victim," he said. Microsoft looks like the "strong, silent type," and Yahoo looks "weak."
"You did walk away from a deal that would have added $10 at least to the value of the stock today," he said. That deal is dead now, "so let's focus on the future."
12:01 p.m. PDT: Meanwhile, outside the meeting, we've just learned that Microsoft released a statement criticizing Yahoo's depiction of negotiations. "Yahoo is attempting to rewrite history yet again with statements that are not supported by the facts," Microsoft said.
Also, in outside developments relevant to the meeting, TechCrunch reports that Time Warner has blocked Yahoo's plans to add former AOL CEO Jonathan Miller to the board as one of three Carl Icahn-backed directors.
12:15 p.m. PDT: One shareholder added, "I'm a little disappointed one third of directors didn't show up." Bostock presents various reasons involving schedules and a medical emergency.
Bostock wraps it up: "With that I'd like to declare this meeting over."
One more question sneaks onto the agenda by popular demand. Why is there only one woman on the board? And why aren't Yahoo employees represented on the board?
There's no real response, so it's now officially over.