Yahoo (YHOO) used to be a great company. It was one of the leaders in the free email addresses market for a while and developed a range of products that were top in their classes, like Flickr and Yahoo Finance. Now, the number of email subscribers it has is considerably less than its peers, coming in at just over 310 million users while Google (GOOG)’s Gmail and Microsoft (MSFT)’s Hotmail each boast roughly 350 million subscribers.
Hedge fund manager Dan Loeb has been pushing for Yahoo’s success since his fund Third Point opened a stake in the company during the third quarter. First on Loeb’s list was removing founder Jerry Yang. The fund manager, who owns roughly 6% of Yahoo, was very vocal in calling for Yang’s resignation and he ultimately succeeded. Yang left the company in January. Loeb also demanded Board Chairman Roy Bostock’s resignation. After a long fight, Loeb won out and Bostock along with four board directors will step down after Yahoo’s annual shareholder meeting next month.
However, Loeb did get everything he asked for. The fund manager had nominated four members to Yahoo’s board – Maeva Group CEO Harry Wilson, former MTV Networks President Michael Wolf, former NBC Universal CEO Jeff Zucker and himself. Loeb’s request was met with a chilly reception and it appears the reason why has come to light.
According to the Wall Street Journal, Yahoo named three new directors on Sunday March 25: John D. Hayes, an executive at credit card company American Express (AXP); Peter Liguori, a former chief operating officer of Discovery Communications (DISCA); and Thomas J. McInerney, outgoing chief financial officer of Internet company IAC/InterActiveCorp (IACI).
“Yahoo said it was been unable to reach a compromise with Dan Loeb,” writes the Wall Street Journal. “Yahoo said it was willing to bring aboard one of those picks, restructuring expert Harry Wilson, plus a different candidate that would be mutually acceptable to both Mr. Loeb and Yahoo, but Mr. Loeb rejected the idea.”
Loeb filed a statement Sunday saying that he was “disappointed by Yahoo’s moves” and that he “intends to continue pursuing a proxy fight.”