Corporate Accountability: Yahoo!, Starboard Value, Activist Shareholder

UPDATE video above: Yahoo to Reconsider Sale of Web Business Instead of Spinoff - Bloomberg Business (8 Jan 2015)

"On Wednesday morning, activist shareholder Starboard Value expressed "extreme" frustration with the company's current leadership, suggesting that they may push for the ousters of both the current board of directors and CEO Marissa Mayer" - Yahoo plans new round of layoffs - San Jose Mercury News

A Look at Activist Behind Starboard's Letter to Yahoo - Activist investor Starboard Value LP is threatening a proxy fight and calling for a change in management at Yahoo Inc. Here's a look at Jeffrey Smith, the firm's leader. (Published on Jan 7, 2016 by WSJ.com)

Yahoo! one-year stock chart (NASDAQ:YHOO) (source: google.com)

When is the Yahoo! Board going to tell CEO Marissa Mayer "it's over" and tell her to leave?

Corporate Accountability: Starboard Value LP is a Yahoo! shareholder and has been engaged (along with other activist shareholders) in urging the Yahoo! Board and management to make changes:

• Starboard Value Calls for Shake-Up at Yahoo and Shift in Strategy - New York Times: "A prominent hedge fund that has long criticized Yahoo's management, Starboard Value, on Wednesday called for changes to the web pioneer's board ..."
• Starboard Value calls for shake-up at Yahoo - Financial Times
• Yahoo investor Starboard Value raises pressure on chief executive Marissa Mayer - The Guardian
• Starboard to Yahoo: Investors have lost confidence - CNBC

Starboard Value's Letters to Yahoo!

• August 10, 2015: Starboard Value Delivers Letter to Yahoo! Inc. CEO (pdf)
• November 19, 2015: Starboard Value Delivers Letter to Yahoo! Inc. Chairman and CEO (pdf)
• January 6, 2016: Starboard Value Delivers Letter to Yahoo! Inc. Board of Directors (pdf)

Excerpt from January 6, 2016, letter:
"... Yahoo’s current management has had over three years to demonstrate progress towards improving the Core Business, but despite these efforts, the Core Business continues to be plagued with deteriorating financial performance and an accelerating number of executive leadership departures. Annual operating costs have ballooned, increasing by approximately $500 million despite revenue that has been declining. In addition, the Company has spent over $2.3 billion on acquisitions. Unfortunately, most of these investments have been misguided, poorly overseen, and, ultimately, shut down. Even with these massive investments, the trajectory is decidedly negative ... EBITDA continues to decline quarter-after-quarter while spending continues at an alarming pace ... The Board must accept that significant changes are desperately needed. This would include changes in management, changes in Board composition, and changes in strategy and execution ..." (emphasis added)

Domain Names:

• yahoo.com
• starboardvalue.com

See also on Domain Mondo:

• Yahoo $YHOO: What's It Worth Without Alibaba and Yahoo Japan? (video)
• Yahoo $YHOO Update: Reverse Spin Off Planned, Webcast Replay
• Yahoo Will NOT Spinoff $BABA, $YHOO Core Business Spinoff Possible

See also: 

• Yahoo's troubled advertising business: "The company's ad business, which brought in $1.15 billion in the second quarter of 2015, is rife with ad fraud, multiple sources told CNBC."
• Yahoo Hires McKinsey to Mull Reorg, as Mayer Demands Exec Pledge to Stay - Re/code: According to several people close to the situation, Yahoo has hired McKinsey & Co. to help the company decide which units to shutter, which to sell ...
• Yahoo Talent Exodus Accelerates as Marissa Mayer's Turnaround Flounders - Re/code: The departures of a number of high-profile executives at Yahoo has accelerated in recent months, so much so that many inside the company are ...
• Marissa Mayer's Convoluted Yahoo Strategy - Re/code: Last fall, in one of the stranger and more expensive efforts to boost company morale, Yahoo CEO Marissa Mayer decided that all her executive staff ...
• Despite Wall Street Noise and Sale Rumors, Yahoo Board Backs - Re/code: As the old saying kind of goes, reports of the impending demise of CEO Marissa Mayer at Yahoo are greatly exaggerated. And so are rumors that the ...
• Yet Another Top Yahoo Media Executive Departs - Re/code: Yahoo's Rob Barrett, who has most recently been its head of media strategy and operations, has left the company, according to multiple sources.
• Yahoo Loses Ad Product Chief Prashant Fuloria - Re/code: Another major Yahoo exec is departing — SVP of advertising products Prashant Fuloria is exiting his job for parts unknown, according to an internal ...
• Here's What's Really Happening at Yahoo - Re/code: If you want to know what's really going on at Yahoo this month, there's one person to ask: Kara Swisher has a comprehensive report about the ...

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Starboard Value Letter to Yahoo $YHOO and CEO Marissa Mayer (video)

UPDATE 9 Dec 2015: Yahoo $YHOO Update: Reverse Spin Off Planned, Webcast Replay

UPDATE 24 Nov 2015: Yahoo CEO Marissa Mayer Faces Morale Challenge - WSJ: "When the Ms. Mayer is forced to deliver bad news, she employs what she calls a “jiu-jitsu move”—trying to create a diversion by producing tantalizing information, according to people who have worked closely with her. For example, Ms. Mayer created an accounting metric called “Mavens” designed to spotlight the growing parts of Yahoo. The grouping includes revenue from mobile, video, native and social ads but excludes Yahoo’s largest portion of revenue—its shrinking business of display ads on desktop computers."

UPDATES 20 Nov 2015:

• Yet Another Top Yahoo Media Exec Departs | Re/code: "...Barrett came to the Silicon Valley Internet giant in 2011 after a long and varied career in interactive media, including at the Los Angeles Times, ABC and Time Inc. He has most recently reported to Martha Nelson, the SVP of all of Yahoo Media. More pertinently, Barrett has been part of a major exodus of talent from Yahoo, which is still struggling under the leadership of CEO Marissa Mayer. Another top media exec, Ken Fuchs, also departed recently, as well as media head and CMO Kathy Savitt. Pressure on the former Google exec (Mayer) is increasing as press and also investors are calling attention to Mayer’s management and strategy for making the company relevant again..."


• Forbes gives the details of the ongoing disaster at Yahoo: The Last Days Of Marissa Mayer? - Forbes: "... most say a confused strategy and mismanagement, specifically from Mayer, has undermined any attempts at a turnaround. Yes, she originally brought hope, a badly needed focus on products and a keen understanding of technology. But as pressure to deliver results has mounted, there’s widespread belief, as reflected in that employee survey, that she’s no longer up to the task. The past few months have seen a mass exodus..." (emphasis added) - See also: SunTrust stock analyst Bob Peck to Yahoo directors: Time to fire CEO Marissa Mayer? - Silicon Valley Business Journal - BTW: When did Marissa Mayer become Yahoo CEO? Answer: July 17, 2012.

It has become increasingly clear that Marissa Mayer is not only grossly overpaid, but is way over her head as CEO of Yahoo. After disastrous moves that have cost Yahoo (NASDAQ: YHOO) shareholders hundreds of millions of dollars, activist investor shareholder Starboard Value has launched a new tack in a letter sent to Yahoo (pdf), sell Yahoo's core business and have the Yahoo corporate entity continue to hold its current shares in Alibaba (NYSE:BABA) and Yahoo! Japan (Tokyo Stock Exchange: Yahoo Japan Corporation) instead of the announced spin-off of those investments to Aabaco Holdings which risks unfavorable tax treatment:

"... we believe selling the Core Business now is the best outcome for Yahoo shareholders. We urge you to change direction and do the right thing for shareholders. As we have expressed to you, we expect the shareholders’ interest to remain of paramount importance and will look to make significant changes to the Board if you continue to make decisions that destroy shareholder value." (empasis added)

Principal domain names of companies referenced:
Yahoo - yahoo.com
Starboard Value -  starboardvalue.com
Alibaba - alibabagroup.com  /  alibaba.com
Yahoo Japan - yahoo.co.jp

For further reading:

• Starboard Value's Jeff Smith: The investor CEOs fear most - Fortune
• A Primer on Starboard, the Activist That Pushed for a Staples-Office Depot Merger - The New York Times
• Yahoo Plans Spin-off Of Alibaba Shares To Aabaco Holdings In 2015 | DomainMondo.com
• Yahoo Pressured to Keep Alibaba Stake and Sell Core Business - The New York Times
• Can Marissa Mayer Turn Around Her Turnaround of Yahoo or Is the “End Game Near"? | Re/code
• An NYU professor just said Marissa Mayer’s pregnancy is the only thing preserving her job - Quartz
• Marissa Mayer’s Convoluted Yahoo Strategy | Re/code
• Yahoo Hires McKinsey to Mull Reorg, as Mayer Demands Exec Pledge to Stay | Re/code

NYU Professor: Yahoo Should Be Euthanized, and Marissa Mayer Is the Most Overpaid CEO in History - Bloomberg Business (video below):

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