For years, the board of Yahoo has been pilloried for a parade of missteps, including ceding ground to upstarts like Google and Facebook and failing to sell itself to Microsoft in 2008.
Now the board is being overhauled, with Yahoo replacing nearly half of the directors. Yahoo’s chairman, Roy J. Bostock, wrote in a letter to shareholders on Tuesday that neither he nor the company’s three longest-serving directors would stand for re-election. The board has elected two new directors, the technology executives Maynard Webb Jr. and Alfred Amoroso, and plans to search for more.
The shake-up, which follows the resignation of the Yahoo co-founder Jerry Yang last month, is the latest step by Yahoo to right itself amid enormous pressure from shareholders. Within the last few months, the company has ejected its old chief executive, named a new one, the former eBay executive Scott Thompson, and engaged in talks to sell its Asian holdings for billions of dollars.
The changes represent a new start as Yahoo seeks to regain its stature as a pre-eminent online property. Despite remaining a powerful hub on the Web, Yahoo has failed to make serious inroads in the new frontiers of social networking and mobile.Many analysts remain skeptical that any strategic shift will be sufficient to revive the troubled brand, which is faced with dwindling options. But the infusion of new blood may buy some time.
“For investors, there will be some satisfaction,” said Ken Sena, an analyst with Evercore Partners. “At least this creates the perception that the board is listening to investors and that they are willing to make changes.”
The shake-up appears aimed in part to blunt a possible challenge by Yahoo’s biggest shareholder, the hedge fund manager Daniel S. Loeb. An acid-tongued activist investor, Mr. Loeb has been preparing for a possible board fight if the company does not make progress in generating better returns for investors.
One of his top targets has been Mr. Bostock, a former advertising executive who became Yahoo’s chairman in 2008. He assumed the role only minutes before Microsoft faxed over an unsolicited $44.6 billion takeover bid, setting off months of wrangling that failed to bring a deal.
Even then, Yahoo’s command of services like search and e-mail had begun to slip. And the company missed out on crucial opportunities, including the chance to buy Facebook for just $1 billion. Facebook is now preparing to go public at a valuation of perhaps as much as $100 billion.
Under Carol A. Bartz, who was hired as Yahoo’s chief in January 2009, the company was criticized for treading water and failing to keep pace with Web innovations. The board fired Ms. Bartz in September, finally initiating an effort — one many analysts and investors say is too late in coming — to lift its fortunes.
With the most recent shake-up, all of Yahoo’s remaining directors will have joined the company’s board after the failed sale to Microsoft. Among them is Brad Smith, the chief executive of Intuit and a main supervisor of Yahoo’s turnaround efforts.
In his letter, Mr. Bostock wrote that the board shake-up would provide a “fresh set of perspectives” and allow Mr. Thompson and the company to move forward.
Mr. Bostock formally acknowledged that Yahoo was in “active discussions” to sell stakes back to Alibaba and Yahoo Japan’s main shareholder, Softbank. But he cautioned that such discussions were complex and might fall apart.
People briefed on the matter but not authorized to speak publicly said that the negotiations were progressing, and that a deal might be announced as soon as next month. But many details need to be addressed, including the final selection of operating assets that would be swapped for Yahoo’s Asian holdings.
It is unclear what those assets may be, though one of the people suggested that they might be businesses in which Alibaba or Softbank already own a piece, including the Chinese social network operator Renren or the online marketplace company Taobao.
Another person said Yahoo had received an informal indication from the Internal Revenue Service that the transaction would be tax-free, an important hurdle.
Mr. Bostock also acknowledged in his letter that the company’s board had reviewed proposals by competing investor groups to sell them a minority stake in Yahoo. Those groups are being led by the private equity firms Silver Lake and TPG Capital, people briefed on the matter have said.
But Mr. Bostock added that neither proposal was likely to gain traction.
“At this time there have not been any proposals which have been deemed by the committee to be attractive to our shareholders,” he wrote.
The board has already determined that both proposals would be too dilutive to existing shareholders, the people briefed on the matter said.
The new Yahoo directors, Mr. Webb and Mr. Amoroso, have deep technological experience but it is unclear if their skills will address Yahoo’s needs.
Mr. Webb, an eBay alumnus and former chief executive of LiveOps, an online call center services provider, is a well-regarded enterprise and e-commerce executive but he has little experience in display advertising or online media.
From 1999 to 2006, Mr. Webb oversaw multiple departments at eBay, including engineering, product development and customer support and was the company’s chief operating officer for four years.
Mr. Amoroso is a director of Rovi, an online video service provider formerly known as Macrovision, and served as the company’s chief executive until December.
Before joining Rovi, Mr. Amoroso was an adviser to Warburg Pincus and a former top executive of I.B.M.’s Asian services business.
Copyright: http://dealbook.nytimes.com/2012/02/07/yahoo-to-name-2-new-directors-as-4-others-to-stand-down/?ref=technology