Yahoo! Shareholder Letter Outlines Forward Momentum and Urges Election of Its Board Nominees
SUNNYVALE, Calif.--(BUSINESS WIRE)--
Yahoo! Inc. (NASDAQ: YHOO), the premier digital media company, today
released the following letter to all shareholders from its board of
Since last August, Yahoo! has moved forward aggressively, implementing a
plan to position itself for future success and to increase the value of
Yahoo! for you, our shareholders.
Just four months ago, we appointed CEO Scott Thompson, a highly
accomplished and dynamic leader with the experience and expertise
required to lead Yahoo! to renewed growth, innovation, and success.
Scott is already moving the company forward fast — dramatically
reorganizing the business around its core strengths with a mindset of
focus, speed, discipline, and putting the customer first.
The company has reconstituted the board of directors, with the
optimal mix of expertise, experience, and fresh perspectives to
accelerate the company's transformation. We recruited five new, highly
qualified independent directors through the Nominating and Corporate
Governance Committee's thorough search process. In addition, four of
our directors volunteered not to stand for re-election at the 2012
shareholders' meeting. As reconstituted, following the annual meeting
a majority of Yahoo!'s directors will be new to the board this year,
and all directors will have joined the board since 2010.
Following a detailed and diligent review in an accelerated timeframe,
the company produced a comprehensive strategic framework that
will change what we do and, most importantly, how we do it to enable
us to put our customers first in everything we do. We will deliver
fun, engaging, and personalized experiences on all screens and forge
strong relationships with our advertisers by producing measurable
results, including consumer insights derived from our vast data, and
delivering a higher rate of return on advertising spend. Specifically,
we will focus all we do on the consumers who trust us to deliver
personalized content and communications in our core businesses, and on
the advertisers who want to connect with our consumers. Just as
importantly, we are identifying what we will no longer do, in order to
direct resources toward those businesses that generate the highest
consumer engagement and the best return on our investment. As we excel
in our core business, we will earn the right to pursue new growth
With this renewed operational focus, the company has defined a new
organizational structure to support our core business and put
resources closer to our customers. Effective May 1, Yahoo! will
operate in three groups — consumer, regions and technology
— all supported by our corporate teams. Each of these three
groups will have clear accountability for getting results by
delivering the best customer experiences. This more efficient
structure will enable faster decision-making and more effective
delivery of innovative products and services that measurably impact
the bottom line.
Beyond our core business, we are committed to continuing to be prudent
stewards of our non-core assets and investments and to be thoughtful
and diligent about monetizing their significant value at the right
time and in the right manner. Should we do so, returning capital to
shareholders will be a high priority.
In identifying qualified new members for the board, the Nominating and
Corporate Governance Committee, led by its independent chairperson Patti
Hart, conducted a thorough and impartial search process. Working
with a leading executive recruitment firm and using the committee's
desired skill sets and experience for new board members, the committee
identified over 100 potential candidates and sought input from a number
of our major shareholders. Committee members engaged with over 20
individuals, including the four nominees proposed by Third Point.
Committee members then conducted numerous in-depth interviews and
carefully analyzed the qualifications of each candidate, including each
of Third Point's nominees. Committee members conducted additional
interviews with those candidates that warranted further consideration,
as determined by the committee in its meetings held throughout the
process. Following completion of the full process, the committee and the
board determined that the distinguished group of five candidates
recently announced were the best choices, based on their individual
accomplishments, experience directly relevant to Yahoo!'s business and
its challenges, and records of value creation.
The new directors have strong records of significant
accomplishment at the highest levels of media, advertising,
marketing, Internet, technology, and finance, including corporate
finance and restructuring, and insight into customers' perspectives. The continuing
directors are independent thinkers who bring impressive track
records of success, and have been actively and constructively engaged as
the company has developed its strategic framework to deliver renewed
success and value to shareholders. We are challenging Yahoo!'s entire
leadership team by asking tough questions, establishing rigorous goals,
and developing a framework for strict accountability to move Yahoo!
Our focus now is on operating the company so that it delivers superior
value to our shareholders. Supported by the many talented people who
have contributed to charting our new course and inspired by the many
shareholders, customers, and employees who have communicated passion for
this great brand, we know that we will succeed.
Regrettably, our efforts to avoid a proxy contest with Third Point were
unsuccessful. Following the recommendation of the Nominating and
Corporate Governance Committee, we offered Third Point two board seats,
including one of its nominees and a second mutually agreeable candidate,
which would bring Third Point's perspective into the boardroom.
Unfortunately, Mr. Loeb declined to end his proxy solicitation on that
basis, insisting that there could be no settlement unless he was
personally appointed to the board. The board continues to believe that
Mr. Loeb himself does not bring the relevant skill set and experience to
the board, particularly in comparison to the candidates selected by the
board. In addition, we believe that, based on the specific
qualifications of Third Point's nominees relative to Yahoo!'s business
and opportunities, the candidates nominated by the board's Nominating
and Governance Committee are significantly superior to those proposed by
Third Point. Nevertheless, we want to emphasize that we remain committed
to an open dialogue with all our shareholders and to working in a
constructive manner with Third Point.
At the end of the day, we recognize that you, our shareholders, will
make the decision as to the board you want to lead your company. We are
confident that when you assess our new board's qualifications against
Third Point's slate, you will come to the same conclusion that we
did—that this is the right board with the right mix of skills and
experience to lead the company forward to create value for shareholders.
We also recognize that we have a great deal of work to do to support and
challenge the management team to move the company forward fast. We
intend to keep ourselves and the company focused and we do not intend to
let ourselves be distracted from the work at hand.
Yahoo! is looking forward, focused on delivering superior
value to all of our shareholders. We are building momentum with a
great leadership team, unified in focusing the company on its core
strengths, redeploying resources to the most productive areas of the
business, and equipping the company to invest in growth and innovation.
Your new board includes individuals who have proven operating expertise
in media, advertising, marketing, Internet, technology, and finance, and
have consistently proven to be thoughtful and responsible stewards of
shareholder value, with a strong emphasis on disciplined capital
allocation and a willingness to embrace structural change. They are
already contributing to the rigorous action plan to realize Yahoo!'s
potential and deliver increased value for shareholders.
With new leadership and the new board, we are building a stronger,
nimbler, more profitable Yahoo! that is better equipped to innovate
for our customers and will ultimately increase the value of Yahoo! for
You can read more about Yahoo!'s actions to move the company forward and
create shareholder value at http://yahooforward.com.
Thank you for your support.
Yahoo! Board of Directors
Important Additional Information
Yahoo! has filed a preliminary proxy statement with the Securities and
Exchange Commission (the "SEC") and will be filing a definitive proxy
statement with the SEC in connection with the solicitation of proxies
for its 2012 annual meeting of shareholders. Shareholders are
strongly advised to read Yahoo!'s 2012 definitive proxy statement
(including any amendments or supplements thereto) when it becomes
available because it will contain important information.
Shareholders will be able to obtain copies of Yahoo!'s 2012 proxy
statement, any amendments or supplements to the proxy statement, and
other documents filed by Yahoo! with the SEC in connection with its 2012
annual meeting of shareholders for no charge at the SEC's website at www.sec.gov.
Copies of the proxy materials may also be requested from the Company's
proxy solicitor, Innisfree M&A Incorporated, by telephone at (877)
750-9499 (toll-free) or by email at email@example.com.
Yahoo!, its directors, executive officers and certain employees are
deemed participants in the solicitation of proxies from shareholders in
connection with Yahoo!'s 2012 annual meeting of shareholders.
Information regarding Yahoo!'s directors, executive officers and other
persons who, under rules of the SEC, are considered participants in the
solicitation of proxies for the 2012 annual meeting of shareholders,
including their respective interests by security holdings or otherwise,
is set forth in the preliminary proxy statement Yahoo! filed with the
SEC on April 27, 2012 and will be set forth in the definitive proxy
statement for Yahoo!'s 2012 annual meeting of shareholders when it is
filed with the SEC.
Yahoo! is the premier digital media company, creating deeply personal
digital experiences that keep more than half a billion people connected
to what matters most to them, across devices and around the globe. And
Yahoo!'s unique combination of Science + Art + Scale connects
advertisers to the consumers who build their businesses. Yahoo! is
headquartered in Sunnyvale, California. For more information, visit the
or the company's blog, Yodel Anecdotal (yodel.yahoo.com).
Forward Looking Statements
This press release contains forward-looking statements concerning such
matters as our strategic, operational and product plans, our expected
financial and operational performance, our management and organizational
changes, and creation of value for our shareholders. Risks and
uncertainties may cause actual results to differ materially from the
results predicted. The potential risks and uncertainties include, among
others, the costs and management distraction attendant to a proxy
contest; the impact of management and organizational changes; the
implementation and results of any strategic plans as well as Yahoo!'s
ongoing strategic and cost initiatives; Yahoo!'s ability to compete with
new or existing competitors; reduction in spending by, or loss of,
advertising customers; risks related to Yahoo!'s regulatory environment;
interruptions or delays in the provision of Yahoo!'s services; security
breaches; acceptance by users of new products and services; risks
related to joint ventures and the integration of acquisitions; risks
related to Yahoo!'s international operations; failure to manage growth
and diversification; adverse results in litigation, including
intellectual property infringement claims and recent derivative and
class actions; Yahoo!'s ability to protect its intellectual property and
the value of its brands; dependence on key personnel; dependence on
third parties for technology, services, content, and distribution;
general economic conditions and changes in economic conditions;
transition and implementation risks associated with the Search Agreement
with Microsoft Corporation; and risks that the benefits of the Framework
Agreement Yahoo! entered into with Alibaba Group, Softbank Corporation
and certain other parties regarding Alipay may not be realized. All
information set forth in this press release is as of May 2, 2012. Yahoo!
does not intend, and undertakes no duty, to update this information to
reflect subsequent events or circumstances. More information about
potential factors that could affect Yahoo!'s business and financial
results is included under the captions "Risk Factors" and "Management's
Discussion and Analysis of Financial Condition and Results of
Operations" in Yahoo!'s Annual Report on Form 10-K for the fiscal year
ended December 31, 2011, which is on file with the Securities and
Exchange Commission ("SEC") and available at the SEC's website at www.sec.gov.
Dana Lengkeek, 408-349-1130
Investor Relations, 408-349-3382
Source: Yahoo! Inc.
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