Page last updated at 23:41 GMT, Friday, 1 August 2008 00:41 UK

Yahoo board emerges unscathed

By Maggie Shiels
BBC News, San Jose

Yahoo shareholder Matthew Rafat
Not all shareholders wanted to dwell on the failed Microsoft deal

Yahoo was told to stop acting like a "jilted girlfriend" and get over the Microsoft affair which resulted in a failed $47.5bn bid to buy the internet portal.

Shareholder Matthew Rafat made his comments at Yahoo's annual meeting of stockholders - which did not turn out to be as combative an affair as expected, with the board winning re-election.

There has been a lot of shareholder anger over how the Microsoft offer was handled but that was not in evidence at the gathering which was attended by around 150 people.

Chairman Ray Bostock disagreed with "the romantic analogy" and told shareholders there was "a lot of misinformation and misunderstanding" surrounding the Microsoft negotiations.

But Mr Rafat, whose family owns around 200 shares, told the BBC raking over the details of the deal was a bad move.

"This makes Bostock look like a jilted ex-girlfriend trying to save her dignity in the face of a larger more formidable suitor. And that's not a good sign for the company."

However Dick Lammerding, who holds 1,200 shares, had only praise for the board.

"I applaud the decision to reject the offer because I see Microsoft as an over-the-hill corporation destroying green octopus from Redmond."

Resignation call

Yahoo shareholder Eric Jackson
Eric Jackson said many shareholders are angry and frustrated

Stockholder Eric Jackson of Ironfire Capital, who controls a consortium of 3.3m shares, had another view and left the board in no doubt about his feelings.

"I think you overpaid on compensation. I think you overplayed your hand with Microsoft and I think you overstayed your welcome after last year's vote and should do the honourable thing and step down from the board."

Mr Bostock greeted that call with a simple "No".

While most of the 800 seats set aside in the Fairmont Hotel's Imperial Ballroom were left empty, the big no show of the day was the corporate raider Carl Ichan.

He bought millions of shares after criticising Yahoo for letting Microsoft walk away from the table and threatened a proxy fight to replace the board with his own hand picked team.

In the end he compromised in a private deal - accepting a seat for himself and two others - who will be named in a couple of weeks.

Mr Icahn explained his decision not to attend the gathering in his blog.

"It will not do shareholders or Yahoo any good to have the annual meeting turn into a media event for no purpose."

His placement on the Yahoo board did not please shareholder Dirk Neyhart who told the BBC, "His view is that he is making better companies, more efficient companies. My view is that I look at his background and see he drives a stake into the soul of a company."

Human rights

While the Microsoft issue overshadowed the meeting, it was not one that company founder and CEO Jerry Yang concerned himself with.

Tony Cruz
They are giving up a part of their value system to get into this market
Tony Cruz, shareholder

He avoided commenting on Microsoft and talked instead of the direction of Yahoo and the challenges that lie ahead.

"We are in the midst of a massive transformation and revolution."

He also pointed out that the internet is the only industry growing in advertising revenue, and that Yahoo was focused on "user growth and dollar growth".

The other focus of criticism for shareholders was that of human rights.

Several expressed concern about an incident in 2007 when the company allegedly assisted the Chinese government in identifying a political dissident, leading to his imprisonment and torture.

After facing public scrutiny and lawsuits, Yahoo's reputation was damaged, said John Harrington, a Yahoo shareholder.

"You lack true morality, which is the morality of obligation, and it already cost this company money and your shareholders money," he said.

In response, CEO Jerry Yang claimed that in light of that incident, Yahoo has become a leader in internet human rights efforts.

"I have personally been involved in discussing how we can improve human rights with just as many people as you can imagine."

But Tony Cruz of Amnesty International, and a shareholder, said he is not convinced and told the BBC that Yahoo and other companies have compromised their principles for money.

"There was a quote once that said by 2012 the Asia Pacific rim market will be worth $800bn and they [Yahoo] want a piece of that.

"They are giving up a part of their value system to get into this market. We just want to see a corporation actually stand up and do what is right. And we haven't seen that yet."


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