Effective January 17, 2012, Founder Jerry Yang resigned from the Board of Directors (the “Board”) of the Issuer and from all other positions with the Issuer. On February 7, 2012, the Issuer announced that Roy J. Bostock, Chairman of the Board, and Vyomesh Joshi, Arthur H. Kern and Gary L. Wilson (the “Retiring Directors”) each had volunteered not to stand for re-election to the Board at the Issuer’s 2012 Annual Meeting of Shareholders (the “2012 Annual Meeting”). The Board also announced that it had appointed two new directors, Fred Amoroso and Maynard G. Webb Jr. (the “Newly-Appointed Directors”).
Although the Reporting Persons are pleased to see the Retiring Directors acceding to the Reporting Persons’ previous demands that they leave the Board, they believe the recently announced changes do not put the Issuer on the right track towards maximizing shareholder value. Installing the hand-picked choices of the current Board does nothing to allay investor fears that Yahoo is poised to repeat the errors of its past. In order to protect and instill confidence in the Issuer’s shareholders, the Reporting Persons believe it is imperative to accelerate the transition of the Retiring Directors and introduce new outside nominees from relevant financial and business backgrounds. The Reporting Persons believe that recent changes do not demonstrate convincingly that Board and shareholder interests are fully aligned, nor that this Board has the fresh perspective and necessary experience to overhaul the Company’s challenged organizational and operating structure.
While the Newly-Appointed Directors possess certain specific technology credentials, key elements of a balanced strategy remain unaddressed at the Board level, fueling further concerns. Recent press reports indicating that the Board’s current strategic direction is to emphasize the technology aspects of the Issuer’s business at the expense of advertising and media, which accounts for the vast majority of the Issuer’s revenues. The Reporting Persons believe that this approach places the Issuer’s core revenue generating capability at substantial risk, fails to recognize the tremendous growth opportunity in video, and directly results from a dearth of essential expertise in media and entertainment at the Board level.
Finally, the Reporting Persons believe that the Board lacks an expert in the type of fundamental corporate restructuring the Issuer requires, along with an independent investor representative aligned with the Issuer’s shareholder base. The reluctance of the Board to prioritize shareholder value to date – evidenced by years of deferring and delaying comprehensive strategic initiatives and missing out on myriad accretive transactions and strategic opportunities – will no longer be tolerated or endorsed by investors. Shareholders deserve earnest representation and oversight as the Issuer confronts the critical investment and capital allocation decisions it expects to face in the next few months.
As a result, the Reporting Persons intend to cause investment funds managed by them to give formal notice to the Issuer that they will nominate Daniel S. Loeb, Harry J. Wilson, Michael J. Wolf and Jeffrey A. Zucker (the “Third Point Nominees”) for election to the Board at the 2012 Annual Meeting. Under the Issuer’s bylaws, this notice may not be given prior to February 24, 2012 or later than March 25, 2012.
Daniel S. Loeb is the Chief Executive Officer and Founder of Third Point LLC, a New York-based institutional asset manager with over $8.7 billion under management.
Harry J. Wilson is the Chairman and CEO of MAEVA Group LLC, a corporate turnaround and restructuring boutique. Before founding MAEVA, Mr. Wilson was a Senior Advisor to the US Treasury Department, serving as a senior member of the President’s Automotive Task Force with principal responsibility for the successful restructuring of General Motors. Mr. Wilson was a partner at Silver Point Capital, a prominent credit-oriented investment fund, before serving on the Automotive Task Force.
Michael J. Wolf is the Chief Executive Officer of Activate, Inc., a strategy consulting firm which works with media and entertainment companies. Prior to Activate, Mr. Wolf was the President and Chief Operating Officer of MTV Networks, a division of the media conglomerate Viacom, Inc. Earlier in his career, he was a senior partner of Booz Allen Hamilton and then McKinsey & Company, in both cases leading their respective media and entertainment groups.
Jeffrey A. Zucker was, until 2011, the Chief Executive Officer of NBC Universal, a subsidiary of General Electric. He is currently the Executive Producer of Katie, a talk show starring Katie Couric, to be launched later this year.
The Reporting Persons believe that the reconstituted Board should consist of the Third Point Nominees, the current directors of the Issuer (other than the Retiring Directors, the Newly-appointed Directors and Ms. Patti Hart, head of the Nominating and Corporate Governance Committee), and additional directors to be jointly recruited by the Board and the Reporting Persons. The Reporting Persons look forward to working with other members of the Board to accomplish this result, and to continuing the process to maximize value for all of the Issuer’s shareholders.
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In connection with their intended proxy solicitation, Third Point LLC and certain of its affiliates intend to file a proxy statement with the Securities and Exchange Commission (the “SEC”) to solicit stockholders of the Issuer. THIRD POINT LLC STRONGLY ADVISES ALL STOCKHOLDERS OF THE ISSUER TO READ THE PROXY STATEMENT WHEN IT BECOMES AVAILABLE BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION, INCLUDING INFORMATION RELATING TO THE PARTICIPANTS IN ANY SUCH PROXY SOLICITATION. SUCH PROXY STATEMENT, WHEN FILED, AND ANY OTHER RELEVANT DOCUMENTS WILL BE AVAILABLE AT NO CHARGE ON THE SEC'S WEBSITE AT HTTP://WWW.SEC.GOV.
THIRD POINT PARTICIPANT INFORMATION
In accordance with Rule 14a-12(a)(1)(i) under the Securities Exchange Act of 1934, as amended, the following persons are anticipated to be, or may be deemed to be, participants in any such proxy solicitation: Third Point LLC, Daniel S. Loeb, Third Point Offshore Master Fund LP, Third Point Ultra Master Fund LP, Third Point Partners L.P., Third Point Partners Qualified L.P., Third Point Reinsurance Co. Ltd., Lyxor/Third Point Fund Limited, dbX-Risk Arbitrage 11 Fund, Harry J. Wilson, Michael J. Wolf and Jeffrey A. Zucker. Certain of these persons hold direct or indirect interests as follows: Third Point LLC may be deemed to beneficially own 68,900,700 shares of Common Stock; Mr. Loeb may be deemed to beneficially own 68,900,700 shares of Common Stock; Third Point Offshore Master Fund LP. may be deemed to beneficially own 35,728,500 shares of Common Stock; Third Point Ultra Master Fund LP may be deemed to beneficially own 13,597,700 shares of Common Stock; Third Point Partners L.P. may be deemed to beneficially own 2,279,400 shares of Common Stock; Third Point Partners Qualified L.P. may be deemed to beneficially own 11,574,000 shares of Common Stock; Third Point Reinsurance Co. Ltd. may be deemed to beneficially own 2,900,000 shares of Common Stock; Lyxor/Third Point Fund Limited may be deemed to beneficially own 1,820,400 shares of Common Stock; dbX-Risk Arbitrage 11 Fund may be deemed to beneficially own 1,000,700 shares of Common Stock; and Messrs. Wilson, Wolf, Zucker and Loeb each have an interest in being nominated and elected as a director of the Issuer.