Yahoo! Chairman Roy Bostock and three longtime board members are stepping down, submitting to the demands of frustrated shareholders who blame them for contributing to the issues that have dragged down the company’s revenue and stock price.
The shake-up continues a drastic makeover of Yahoo!’s leadership during the past month as the company negotiates to sell its Asian assets in a complex deal that could help ignite a long-promised turnaround.
After Yahoo! hired former PayPal executive Scott Thompson as its CEO a few days into the new year, co-founder Jerry Yang resigned from the board and severed all other ties with the company that he helped start in 1995.
Now Bostock is departing after four years as chairman. Many shareholders still blame him and Yang for squandering an opportunity to sell Yahoo! to Microsoft in 2008 for $47.5 billion, or $33 per share. Yahoo’s stock hasn’t traded above $20 in nearly 3 1/2 years.
Bostock, a former ad exec, more recently has been attacked for not moving more aggressively to fix the problems that have caused Yahoo! to sink into a deeper financial rut while Google and Facebook have soared. Bostock became so unpopular among shareholders that nearly 40% of the votes were cast against his re-election in Yahoo’s first annual meeting after Microsoft withdrew its takeover offer.
In a move that will give Thompson an even cleaner slate as he tries to come up with a new strategy, Yahoo board members Vyomesh Joshi, Arthur Kern and Gary Wilson also agreed not to seek re-election at Yahoo!’s shareholders meeting this June.
Kern, a former radio station owner, has been on Yahoo!’s board for more than 15 years. Wilson, a former airline executive, has been a director since 2001, and Joshi, a Hewlett-Packard exec, has been a director since 2005. Kern was specifically co-founder and CEO of American Media, a group owner of commercial radio stations sold to AMFM (now part of Clear Channel Communications, Inc.) in October 1994.
The shake-up is likely due to the Facebook IPO coming down the pike. When it goes public, Yahoo! will take an even bigger hit. Facebook’s IPO documents revealed its revenue surged 88% to $3.7 billion in 2011 while Yahoo’s declined by more than 20% to just under $5 billion. If that trend continues, Facebook’s revenue will surpass Yahoo’s this year.
RBR-TVBR observation: Many Yahoo! email members bailed when Google’s Gmail came on the scene. And while Yahoo has tried to be everything to everyone, most everything it touches doesn’t match up to what Google or Facebook are offering (i.e. Yahoo! Geocities with its free and premium websites to users is now gone).
Some of us also remember a colossal goof that Yahoo pulled in buying Mark Cuban’s Broadcast.com (formerly Audionet) for $5.7 billion in 1999. What a colossal waste of money that was. Over the next few years Yahoo! split the services previously offered by Broadcast.com (it was called Yahoo! Broadcast for a while) into separate services, Yahoo! Launchcast for music and Yahoo! Platinum for video entertainment. Yahoo! Platinum has since been discontinued, its functionality being offered as part of two pay services, AT&T Yahoo! High Speed Internet and Yahoo! Plus. As of May 2011, neither broadcast.com nor broadcast.yahoo.com both simply redirect to yahoo.com