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Woohoo for Yahoo

ryan-kevin
by , Comments

Two things happened in the last week that may just restore my faith in humanity. First, Carl Icahn found his way to compromise. Second, Yahoo's shareholders re-elected the board and decided to keep Jerry Yang at the helm...for now.

Even after the vote re-count, a majority of shareholders voted the board in and Icahn settled for the right to propose two board seats and a spot for himself. In doing so, Icahn proved the last several months of back and forth on who should be running Yahoo is more than self-indulgent oral flatus.

At the end of the day, what's more important than rebuilding the Web's biggest brand? Why the compromise now? Who should really be running Yahoo? What can we expect in the coming year? All this and more dear friends, read on.

Relationship Counseling

Why the move to compromise after coming out so strongly against the board? Ever walk into an emotionally charged meeting? Fireworks in the boardroom are fun to watch, but nothing good ever comes from emotion-filled meetings.

Compromise makes sense if productivity is what you seek. People afraid for their jobs can really only accomplish working on saving their jobs. Compromise also makes sense if defeat is imminent, which may have been the case in this instance.

Icahn wanted the board out because he felt the Microsoft acquisition was botched. Yahoo management recently invested heavily in explaining their side of the story. When all is said and done, it doesn't matter who said what to whom in the back of the boardroom. Yahoo and Microsoft don't have a deal yet.

Pieces of the Whole

The election was not without controversy. Yesterday, a disgruntled investment house and Yahoo shareholder, Capital Research Global investors, asked for a recount of last week's voting that helped Yang and eight other directors stay at Yahoo's helm.

In a nutshell, it seems Capital instructed funds under its control to withhold votes from certain directors, and because people always do exactly what they're told, the vote must have been wrong. Of course, a stunt like this inadvertently (and I'm sure unintentionally) draws more attention to the 15 percent or so of shareholders who voted down the existing Yahoo directors.

Capital Research holds about 6 percent of Yahoo stock, and its votes didn't change the outcome, so complaining about a possible error is like a very loud child stomping his feet in protest. Lots of noise, no action.

Big Ideas

Yahoo's directors now have a 12-month window to make miracles happen. If I may be so bold, I'd like to offer Yang and Co. some advice for the coming year. If history teaches us anything at all, we know that instances of buying audience share are few and far between.

1. Stop trying to gain audience share through acquisition. It almost never works, and you're far better off organically growing traffic. If an acquisition is in the cards, let acquiring an audience be your second, third or 478th priority.

2. Keep working the social construct and portal strategies. Over the long term, these two big ideas will be your best friend. Since shareholders tend to have short attention spans and even shorter memories, the best way to build audience share and make the company look better, is by proving that organic growth is possible.

Join us for SES San Jose, August 18-22 at the San Jose Convention Center.


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