Executives from Sunnyvale, California-based Yahoo defended the Web pioneer's strategy in dealing with  attempts by Microsoft to take over the company and pointed towards strong future growth prospects during its annual shareholder meeting held Friday in San Jose, California. About 200 Yahoo shareholders attended the meeting, many of them upset with the company's handling of the Microsoft takeover attempt, although few of Yahoo's large institutional investors attended. Shareholders voted to retain the existing board. Yang Says Internet Is "The Only Industry" For Ad Growth Yahoo co-founder Jerry Yang faced shareholders for the first time at the annual meeting as the company's chief executive, after spending half of his time in the post fighting to keep Yahoo an independent company. Shareholder anger was not limited to Yahoo's handling of the failed takeover dealings with Microsoft, with some investors expressing frustration with the company's decision to expose the identities of Internet dissidents to officials in China. Chairman Roy Bostock noted that Yahoo's financial performance through the first two quarters of 2008 had met expectations while having to deal with the disruptions caused by the Microsoft offer, and offered good growth prospects over the next three years. "I think that is one hell of a performance for this management team considering what they been through the last six months," Bostock said at the meeting, which was held in the Imperial Ballroom at the Fairmont Hotel in downtown San Jose, not far from the company's Sunnyvale headquarters. Yang said that Yahoo was undergoing change and that the company was headed in the right direction. "We are still in the middle of a massive transformation," Yang said. "The Internet is still the only industry -- really -- that's growing in advertising revenue," he added. No Compelling Offer From Microsoft, Bostock Says Yahoo management tried to sooth the concerns of some angry investors by insisting that the company had dealt seriously with Microsoft, which it said had not put forth a good enough offer. "There was never a compelling offer put on the table. That never occurred in this process," Bostock said. More than half of Yahoo's share are controlled by huge institutional investors, however few were in attendance  Friday, as many seats remained empty during the annual meeting. The meeting had been anticipated to include the fireworks of a proxy takeover attempt led by billionaire activist investor Carl Icahn, however Yahoo forged an agreement with Icahn last week giving him a seat on the board of directors, which made Friday's meeting far from the contentious event it might have been. Icahn decided to skip the meeting, and downplayed its importance in a message posted Thursday on his blog. Icahn had said that had his proxy bid proven successful, he would have fired Yang. Some shareholders expressed their approval of Yahoo's handing of the failed Microsoft talks. One investor said Yahoo had been saved from Microsoft, an "over-the-hill green-tentacled octopus." The board made its first public appearance since it rebuffed Microsoft's offer to buy Yahoo for $47.5 billion in May. Call For Bostock To Step Down Refused "We also absolutely feel that we have to look out for what's best for shareholders," Yang told investors Friday. "The board and the management team have always said, 'What is it that we can do best for our shareholders?' " he added. One investor holding less than 1,000 shares of Yahoo, retired stockbroker Dirk Neyhart, asked the board to produce evidence of the effort they have claimed to put forth recently. "I'd like to see timesheets posted on the Internet for the work of the directors as well as for the executives of the company," Neyhart said. Bostock offered to comply. "It's been about 26 hours in the course of a 24-hour day," Bostock said. Investor Eric Jackson of Ironfire Capital LLC asked that Bostock resign if enough shareholders withhold votes, drawing applause from some attendees Friday. "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 honorable thing and step down from this board," Jackson said. Bostock responded by saying that he would not step down. Bostock said that maximizing shareholder value was Yahoo's top priority during negotiations with Microsoft, and attempted to put to rest speculation that his company was unwilling to let the world's largest software maker buy it. "I want to make it absolutely clear -- the board controlled the process of dealing with Microsoft right from the beginning," Bostock said. "Every step along the process our number one priority was to maximize shareholder value," he added. In an e-mailed statement Friday a Microsoft spokesman harshly opposed Bostock's remarks, noting that "Yahoo is attempting to rewrite history yet again with statements that are not supported by the facts." Yahoo Defends Strategy At Annual Meeting, Wins Strong Shareholder Support Bostock said that Yahoo had been the victim of misunderstandings during its dealings with Microsoft. "With all the hoopla, with all of the publicity that has surrounded the company in the past six months there has been a great deal of misunderstanding," Bostock said. "The board controlled the process of dealing with Microsoft right from the beginning. We called the shots and were deeply involved in every step," added Bostock. Late Friday afternoon Yahoo released the results of the stockholder meeting, with all nine board members up for re-election receiving more than 75 percent of shareholder support. Yang garnered 85.4 percent of shareholder votes, with 14.6 percent withholding their shares. Bostock received 79.5 percent, with 20.5 percent withholding shares. In a statement Friday Yang said Yahoo was in a unique position. "We are at a unique point in our history, where we have the eyes of the world focused on our Company and tracking our performance," Yang said. "We are redoubling our commitment to driving sustained, profitable growth for our stockholders. The value inherent in Yahoo!'s unique collection of assets is truly extraordinary, and the progress we've made on our initiatives this year signals our ability to capitalize on the underlying potential of these assets," Yang added. Related Links:
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