Yahoo annual meeting marked by what wasn't said
CEO Carol Bartz says her company is performing well in key metrics and has "made substantial progress" in plan to turn company around. But she leaves out some hot-button issues and investors notice.
Yahoo today held its annual shareholder meeting, and although the company touted its growth in some areas, it failed to discuss some of the hot-button issues on the minds of investors.
That was made clear by a shareholder who took aim at Yahoo CEO Carol Bartz during the meeting's question-and-answer session. The investor told Bartz that he wanted to discuss "the elephant in the room"--namely, recent rumors that Yahoo's board of directors is secretly considering replacing Bartz with another CEO.
Yahoo failed to discuss the rumor during the investors meeting, though chairman Roy Bostock said that the board "is very supportive of Carol and the management team."
Citing Yahoo's sub-$15 stock price, the investor told Bartz that the search for her replacement should be "expedited," and a replacement must be named sooner rather than later.
Bartz, seemingly perturbed, thanked the man for his statement and said that his comments were "certainly a downer."
In an e-mailed statement to CNET, a Yahoo spokesperson said that the company is not searching for a replacement for Bartz.
"Rumors suggesting there is or has been any sort of search for a replacement to Carol are categorically untrue," the spokesperson said.
What about Hulu?
Earlier this week, the Los Angeles Times cited a source who claimed to acquire the video provider, though details related to the deal were not disclosed. Hulu wasn't considering a sale at the time of the bid, but it has now reportedly enlisted the help of two investment banks to find a potential suitor.
Bartz stopped short of discussing a Hulu buyout at today's investor meeting, but she did mention the company when discussing Yahoo's shows. Bartz said that "8 out of the top 10 original video programs on the Web" come from Yahoo and the company's entire catalog of 20 Web shows "have more viewers than all of Hulu."
Aside from video, Bartz discussed several important metrics that she believes shows Yahoo is performing well across the Web. The CEO said the company now has 680 million users around the world. Nine of the company's properties, including Yahoo Finance and Yahoo Sports, are the most-popular Web sites in their respective focus areas, helping to make Yahoo.com the top U.S. Web property, she said.
"We stand alone as a premier digital-media company," Bartz said during her remarks.
Bartz, the savior?
Bartz at a tumultuous time in the company's history. Yahoo had turned down buyout requests from Microsoft, and its financial performance was plummeting. The board decided that the site's co-founder and then-CEO Jerry Yang, needed to be replaced.
During today's shareholder meeting, Bartz showed a "revenue growth" graph that outlined how the company's search and display advertising revenue had declined prior to her arrival. Since then, however, display-ad growth has turned positive, she said. In addition, the company's search revenue growth has slowed its decline, but it's still negative year-over-year.
Bartz acknowledged that Yahoo's search-revenue decline isn't a good thing, but she pointed out that the negative revenue was "expected," due to the, paving the way for the software giant to power Yahoo Search. She explained that Yahoo currently gives 12 percent of its search revenue to Microsoft, and since that , comparisons between 2009 revenue when Yahoo wasn't paying the fee to Microsoft and last year when it was, are not necessarily fair.
Though some investors have disagreed with Bartz's handling of Yahoo, the company has become more profitable over the last couple years. At the end of 2008, Yahoo generated a profit of $418.5 million on $7.2 billion in revenue. In 2009, the company's profit jumped to $598 million on $6.4 billion in revenue, followed by a $1.2 billion profit last year on $6.3 billion of revenue.
However, as the aforementioned disgruntled investor pointed out in today's shareholder meeting, Bartz failed to discuss Yahoo's share price. The company's shares are now hovering at $14.90, and have remained relatively static over the last year, ranging between a low of $12.94 and a high of $18.84. Over the last five years, Yahoo's shares are down more than 52 percent.
Though Bartz acknowledged that more work needs to be done, she kept a brave face during the meeting, saying that she and her team have "made substantial progress in our plan to turn Yahoo around."
Looking ahead, Bartz said that Yahoo plans to continue tailoring content to individual users. She said the company currently serves 45,000 versions of its home page to users every 5 minutes to help personalize the experience of using its site.
Yahoo is also working on launching 135 sites on the company's new publishing platform, which will make it easier for its content creators to get new stories to the site. So far, 50 sites have been transitioned to the platform. As part of that transition, Yahoo plans to launch 50 new sites around the world to increase user engagement.
In addition to Bartz's comments during today's shareholder meeting, Yahoo's investors also voted to keep the company's current board in place for another year. Most of the company's directors, including Jerry Yang, earned 90 percent approval from shareholders. Bartz and Borstock, however, secured 80 percent approval.
Update at 11:38 a.m. PT to include Yahoo statement on alleged CEO search.