Yahoo! Inc., a month after hiring Scott Thompson as chief executive officer, added two directors and announced the departure of Chairman Roy Bostock and three others in a board shakeup aimed at spurring a turnaround.
Alfred Amoroso, a former International Business Machines Corp. executive who ran Rovi Corp. until last year, and Maynard Webb, EBay Inc.’s ex-chief operating officer, will join the board, Yahoo said today in a statement. Bostock, Gary Wilson, Arthur Kern and Vyomesh Joshi, meanwhile, won’t stand for re-election as directors.
Yahoo, the biggest U.S. Web portal, has faced mounting pressure from shareholders to revamp management following years of declining sales and market-share losses to Google Inc. and Facebook Inc. The company, in the midst of a strategic review, said today it has weighed proposals for equity investments yet hasn’t received an attractive offer. It continues to discuss a possible sale of its holdings in Asian assets, including Alibaba Group Holding Ltd.
“Yahoo shareholders are happy to see change at the board,” said Clayton Moran, analyst at Benchmark Co. in Delray Beach, Florida, who has a “hold” rating on Yahoo. “But it also may signal that the Asian asset sales haven’t made meaningful progress. You’re replacing several board members in the middle of very important negotiations.”
The company said it is devoting “significant resources to these discussions.” Yahoo has minority stakes in Yahoo Japan and Alibaba, the biggest e-commerce company in China.
At the same time, Yahoo is searching for more independent directors, an effort being led by board member Patti Hart, CEO of International Game Technology Inc. Yahoo didn’t name a chairman to replace Bostock.
Following this year’s annual meeting, most of Yahoo’s directors will be new to the board and all of them will have joined since 2010, Yahoo said. “We believe that this reconfigured board, with a fresh set of perspectives and diverse set of skills, will enable the company to move forward even more aggressively.”
Amoroso was CEO of Rovi, a provider of digital home-entertainment products, through the end of 2011. He had been head of Rovi and predecessor companies since July 2005. Amoroso was also CEO of META Group Inc. and CrossWorlds Software Inc., and he was a member of IBM’s worldwide management committee.
Webb has been chairman of LiveOps Inc., a provider of call-center technology, since 2006 and served as CEO of the Santa Clara, California-based company from late 2006 through July 2011. Webb also was a senior vice president and chief information officer at Gateway Inc.
Bostock’s tenure as chairman was tainted by market-share and stock-price declines, management upheaval, and the rejection of a $47.5 billion takeover bid from Microsoft Corp. in 2008. Yahoo’s market value is now $19.6 billion, less than half the offer price.
While Jerry Yang, a Yahoo co-founder and then CEO, handled much of the negotiations with Microsoft, it was Bostock who co-signed a letter announcing that takeover talks were over. The company said the Microsoft’s bid was “not in the best interests of Yahoo stockholders.”
Third Point Clash
Yahoo investor Third Point LLC ramped up pressure on the company’s board last September, when the firm increased its stake and reiterated a demand that Bostock step down. Daniel Loeb, CEO of Third Point, said he told Bostock and Yang in a phone conversation that he planned to “pursue whatever efforts were necessary to remove Mr. Bostock from the board,” according to a filing. The dialogue ended when “Bostock terminated the call,” Loeb said.
Bostock’s departure follows that of Yang, who resigned from the board and all other positions at the company last month. Thompson, the new CEO, joins from EBay, where he served as president of the company’s PayPal unit.
“The more of the men who turned down the Microsoft deal leave, the better a chance is we get an Asian deal done faster,” said Laura Martin, an analyst at Needham & Co. in Pasadena, California. She recommends buying the shares, which she doesn’t own herself.
The year after the failed Microsoft takeover, Yahoo brought in Carol Bartz as CEO to help drive a turnaround. When she struggled to revive revenue and Yahoo’s stock price, Bostock fired her by phone on Sept. 6.
While he drew flak at Yahoo, Bostock had success as chairman of Northwest Airlines, guiding it in 2008 through a $2.75 billion merger with Delta Air Lines Inc.
Bostock became a Yahoo director in 2003, after a 38-year career in advertising. He sold BCom3 Group, the global ad agency where he was chairman, to Publicis Group in 2002 for $3 billion. Outside the corporate world, he’s served as chairman emeritus at the Partnership at Drugfree.org and has donated money to Duke University, his alma mater, where a library is named after him.
“We all take pride in the fact that we are positioning Yahoo for success in the future,” Bostock said in the statement. “I have every expectation that under Scott’s leadership, working together with the reconstituted board, the company will thrive for many years to come.”
Shares of Sunnyvale, California-based Yahoo rose less than 1 percent to $15.83 at the close in New York. The stock has dropped 1.9 percent this year.