LIVE BLOGGING: Yahoo! Inc. 2008 Annual Meeting Of Stockholders

Posted Aug 1, 2008

I’ve just tuned into the Yahoo Inc. (NASDAQ:YHOO) 2008 Annual Meeting of Stockholders.  The event takes place at The Fairmont of San Jose, 170 South Market Street, San Jose, Calif.  The meeting will be commencing at 1PM EST.

Below is the meeting minutes that I have put together.  As I watched the video, I tried to type everything as accurate as possible.

3:12PM-3:14PM EST – Another stockholder is asking why there is only one woman on the Board?  The stockholder added that the Board spoke well.  Bostock added that the company is committed to diversity and has called the end of the meeting.
3:06PM-3:11PM EST – Another stockholder from Baltimore: “I’m a little disappointed that 1/3rd of the Directors did not show up.”  Some of the Directors barely hold any stock.  “Maybe they aren’t interested because they don’t have any stock?”  Bostock stated that within 3 years of serving on the Board, all Directors will own 12,000 shares of Yahoo!  Directors that could not make it: 1 had left the company, 1 more had a commitment in Europe, and another Director had a medical emergency.  All Directors have been in attendance in prior years.
3:02PM-3:04PM EST – Another stockholder said the acquisitions that Yahoo! has selected has been quite good.  Stockholder was happy that Microsoft did not succeed in acquiring the whole company.  Asking Yahoo! about their strategy.  “How do you intended to differentiate your offering and platform?”  The newspaper consortium has quadruped to 800.  Many of those in the newspaper consortium used to run on DoubleClick, but has agreed to use Yahoo!
3:00PM-3:01PM EST – Another stockholder called Microsoft a green-tentacled octopus and prefers the current board.
2:59PM-3:00PM EST – Another stockholder & former employee wants the management team to conduct voting after comments were made on proposals.  Everything that was talked about on the slides today was advertising.  Is there any other revenue ideas?  Decker: Several premium services are available such as Fantasy sports.  Advertising has been 80% of Yahoo!’s revenue since inception.
2:54PM-2:57PM EST – Amnesty International stockholder asked Yahoo! about a letter that they sent that didn’t get a response.  “We do not believe that Yahoo! is even close to meeting humans rights challenges with it’s current policies.”  Yahoo! has not publicly called out for the release on a specific Chinese prisoner.  What is the company doing to avoid in compliance for turning over user information, including subsidiaries?  Yang actually did send a letter specifically regarding the Chinese prisoner.  It feels like Yahoo! has not communicated to Amnesty about the efforts that they have done on human rights.

2:50PM-2:51PM EST – Yang says that Yahoo! has condemned the Chinese government for censoring the Internet.  This is an ideological issue.  Yahoo! has talked with the State Department and they believe that the State Department is trying their best to put this issue at the top of their agenda.  Yahoo! is engaged with State Department on human rights.  Decker thanks stockholder for being a fantasy sports user.
2:43PM-2:50PM EST – Another stockholder: “This company would not be here without Mr. Yang.”  No on seems to have mentioned that.  “It’s very important to point that out.” Yang did not intend on the end result to occur in China.  Did not have malicious intent.  Having said that, it’s also important to understand that when a mistake is made, even an unintentional one, it is difficult to separate from a negative image.  It may be condusive to have a catharsis period–perhaps go on a Sabbatical.  It may be important to focus on that short-term solution.  “I use Yahoo! primarily for fantasy sports.”  No one has actually mentioned that division.  That is the reason why I have a Yahoo! account.  I want the company to invest in that franchise.
2:40PM-2:43PM EST – Another stockholder says that he is concerned with the productivity per employee.  “Our revenue per employee” is half of Google.  This indicates there are a lot of problems in-house per employee.  Asks if the platform over the last 2 years has been developed enough to compete with Google.  The deal with Google will allow Yahoo! to make money from ads, then reinvest it to improve upon themselves.  There are systems and infrastructure being built at Yahoo! that will allow them to compete over time.
2:39PM-2:40PM EST – Bostock doesn’t believe he made $500K.
2:32PM-2:37PM EST –
Yang: “Nice to see you again.”  Tax reasons for selling Overture.  Get the #1 search engine in Japan on our platform would be good for shareholders.  Sue is within the guidelines for serving on external boards.  “You learn a lot from Boards.”  Sue: “I appreciate the question,” separate from the guidelines, the boards that I’ve selected have been beneficial to the way we run the company.  Learned a lot from CostCo, Berkshire Hathaway, and Intel.  As Intel is a technology company, it relates to Yahoo!  Decker made sure that the time commitment to external boards were not significant.  Decker does not attend all the meetings.  Decker is one of the hardest working board members.  Sue’s participation on those boards are consistent with the policies of the committee.  Bostock doesn’t think that narrow 34% vote against him should not decide for him to step down.
2:25PM EST-2:31PM – IronFire Capital – Eric Jackson asks question about governance, mostly to Jerry and Roy.  “On August 31, Yahoo! sold Overture to Yahoo! Japan.”  A $400 million business for $13 million.  “There was some explanation about how it was going to be good for Yahoo! in the long run.”  To Jerry: Did you excuse yourself from those negotiations. Who negotiated on behalf of Yahoo!?  Decker sat on three outside Boards, Decker attended 22-23 meetings in the last year including Berkshire and Intel.  “As a Yahoo! shareholder,  I question the amount of time that that takes.”  “Is that the best use of time for you?”  “How much time does that take in terms of attending and preparations?”  “Would you consider in stepping down to two of those commitments?”  Question to Bostock: last year 34-36% of shareholders did not vote for Bostock’s re-election, Bostock has never addressed that vote.  Did you think that by not stepping down, that placates shareholders.  Although Jerry is paying himself $1 per year, Bostock pays himself $500,000.  Jackson would like to see time sheets for the last 4 years.
2:22PM-2:24PM EST – Yang has the floor. Summarizing the meeting. “Our operating model will allow us to accelerate our growth.” “We’re focused on execution.” “I think we have a terrific asset, a terrific company, and terrific people.” We feel that we have to look out for what’s best for stockholders and shareholders–as we move the company along and continue to invest-the board and management team has always said, what can we do that is best for shareholders. 15 minute Q&A to the board. One question per person.
2:16PM-2:21PM EST –
Blake Jorgensen now has the floor. Focus on financial results–forecast for the year. In a bad economy, Yahoo! continues to see gap revenue growth.  Operating cash flow has not grown much because company continues to invest in Panama and several other technologies.  $3.2 billion cash on the balance sheet.  That cash has been used historically for acquisitions or share repurchases.  Now share repurchases made this year.  Have not done it because of Microsoft.  Small acquisitions this year.  Three key components that we don’t show in operating earnings: Y! Japan,, and Gmarket (Korea).  Y! Japan is one of the largest Internet companies outside of the US.  Yahoo! has $7.7 billion in market value with Y! Japan, $2 billion market value in Alibaba, and $108 million in GMarket market value.  Combined, this is $9.8 billion.  Maximizing shareholder value is the number goal of management and of the board.
2:00PM-2:16PM EST Decker has the floor.. focus on how Yahoo! makes money and ecosystem.  Paid through Search and Display ads.  Display includes News, Finance, Mail.  Certain spots reserved for paid advertising on Yahoo!’s pages.  Our top 200 advertisers–represent 90% of ad revenue.  Yahoo! has the strength and scale for Ad placement and Search combined.  Yahoo! is developing simple & automated display advertising platforms, Yahoo! is positioned to capitalize on search and display advertising, Yahoo! is re-wiring networks to bring “Open Yahoo!” This draws in the best of the web.  In terms of mobile, the industry is PC-focused.  Users all over the world are starting their experience with mobile devices, clearly if you look at the platform approach–from a consumer and advertising standpoint, Yahoo! is versatile.  Talking about Buzz–users are seeking simple, easy ways to find the best of the Internet.  The second industry need is that all these publishers are trying to capture the attention of users (USA Today and Time uses Buzz badge being used).  Publishers are rewarded when content reaches the homepage by sending traffic.  “we just surpassed Digg.”  “We spent a lot of years after acquiring Inktomi in improving search. Search Assist launched last Fall–drop down menu appears with interpretations to find out what users are interested in when searching.  Search Monkey is a product that allows developers and companies to innovate on the search results themselves–ratings were made by Yelp.  Mobile–Yahoo! Go 3.0 launched and went successfully.  Now talking about positive traction and reviews from market–Forrester says that Yahoo! platform makes it easy for advertisers to setup ads.  IDC says Yahoo! has developed better mobile integration for customers than Google.

1:46PM-2:00PM EST Yang has the floor.  “What I want to do is 3 quick things.”  Remind everyone what the Internet opportunity is.  Even though Yahoo! has been around since 1995, we are in the middle of a revolution.  Remind everyone what Yahoo! has in terms of assets and talk about strategy.  The confluence of mobile, broadband, and video are coming together in a rapid way.  “The Internet is still the only industry that is growing in advertising revenue.” “The market continues to grow.” Yahoo! is in a well position to be in.  Yahoo! is a great brand.  We have a brand that is well recognized around the world… a brand that attracts a huge amount of users.. and a huge amount of advertisers and publishers.. we have well over 500 million people use Yahoo! every month.  and we have very valuable strategic positions in Asia where there is a lot of value.  Investing in mobile and emerging markets.  “What have we been doing the last year.” “The strategy is quite simple.” We are focusing on starting points: homepage, email, search.  Effort around Must Buy.  Wants advertisers to come to Yahoo! to advertise.  “We have partners like eBay, Viacom, Wal-Mart” that augment inventory.  The other effort of Must Buy, in addition to the partners, is to build a platform.  This platform as Sue will detail, enables advertiser or publisher to make buying on the Internet easy.  “When you look at the last 12 months,” our management team realigned our advertising business.  We invested in performance advertising businesses like RightMedia and BlueLithium.  Aligned sales forces.  Aligned leadership teams to recognize the marketing aspect.  Continued to invested in search monetization with Panama launched last year.  “Starting points for us was to really get Yahoo! to meet the challenges and opportunities that we have in the next generation of Internet users.”
1:36PM-1:45PM ESTBostock has the floor.  Giving 2007/2008 year in review.  The Board led the whole Microsoft deal… every step along the way… the only goal was to maximize the shareholder value… The $31 bid made by Microsoft was the only written proposal from Microsoft.  As Microsoft’s stock price dropped, the deal turned out to be $28 per share.  Microsoft’s proposal “substantially undervalued Yahoo!” and “we communicated this to Microsoft.”  “This Board and this management was open to a transaction that yielded” maximum value for shareholders.  “It’s important for all of you to know that.”  “We encouraged Microsoft to engage in more constructive talks with us.”  “They stated that they might lower their price and engage in a proxy fight.”  “Eventually, they verbally in an offhand comment,” “they said there may be a few more dollars on the table.” To this day, Bostock cannot tell you why they withdrew the offer to acquire the entire company.  Then entered a deal with Google.  Microsoft proposed a deal to rip the search engine out of the company.  But “ultimately, a deal wasn’t struck.” The Microsoft deal was not compelling enough.  Last week, Yahoo! agreed with Icahn Associates.  “Carl’s a smart guy.” “Carl’s a good guy” “He has a view” “We look forward to additional to two additional directors.” Talks about Yahoo!’s finance accomplishments.
1:33PM EST –
Yang, Bostock, Decker giving statements. Bostock quips that he works 26 hours per day in regards to the time sheets.
1:33PM EST –
Polls are closed.
1:31PM EST
A stockholder wants accountability of work hours.  Wants to see time sheets of Directors for how much business was conducted for Yahoo!
1:28PM-1:31PM ESTA Beijing-born common stockholder wants Yahoo! to be reminded of doing business in China.  Stockholder proposes to have Yahoo! improve business in China.  Shareholder wants Yahoo! to have a clear China policy.
1:26PM ESTOne common stockholder is claiming: that the Carpenters Union is corrupt and the Comptroller is a politician, running for Mayor of New York.  The Comptroller picks out several proxy statements every year.  Mr. Harrington’s “statements and coming to meetings are self-serving.”
1:25PM ESTCommon stockholders will be discussing the proposals
1:25PM ESTBallots are being taken for the shareholder proposals
1:10PM EST-1:23PM ESTFive items of business: 1. Election of Directors until 2009 annual meeting of stockholders (current board members listed including Bostock and Yang), 2. Appoint PwC as Yahoo!’s accounting firm, 3. Three stockholder proposals.  First: United Brotherhood of Carpenters (Dave Collins) pension fund is asking for compensation payment plan.  Second: City of New York Office of the Comptroller wants Yahoo! to stop sending information about Yahoo! users to China.  The company should be proactive in censorship.  Use legal means to advocate censorship.  Third: Mr. John Harrington, Yahoo! amend the company’s bylaws to add a committee of human rights.
1:08PM EST – Gold card that was submitted will not be counted due to settlement with the Icahn Group.  Previous gold proxy cards will not be counted.  New ballots will be used for voting.
1:07PM EST – Holders of over 50% that own stock are attending the meeting.
1:05PM EST – Program to be divided in 3 parts: 1. official business (stockholders of record are entitled to vote in the annual meeting), 2. Jerry Yang, Sue Decker, and Blake will go through a presentation, 3. Questions and Answers from everyone in attendance to management.
1:03PM EST – Bostock thanks Jerry Yang.  Bostock thanks officers: David Filo, Sue Decker, Blake Jorgensen, Michael J. Callahan, and Aristotle N. Balogh.  Bostock thanks Lang Johntston and Chuck Roberts.  Chuck and Lang will tabulate the votes.
1:01PM EST – Over 30 board meetings in the last few months.  Bostock thanks the board.   Introduces the board.
1:00PM EST – Roy Bostock opening
1:00PM EST –The presentation is about to commence

12:40PM EST- Here are some current facts about Yahoo!  This is running on the slideshow:

– An average of 2.9 million photos are uploaded on Flickr per day.
– Yahoo! branded services reach 1 out of every 2 Internet users around the world.
– Yahoo! is the most visited site online with over 3.5 billion visits in the U.S.
– In the U.S., 12% of all time online is spent on Yahoo! sites, equal to Microsoft and Google combined.
– In the US nearly 8% of all time online is spent engaged with Yahoo! Starting Points, more time than is spent with all Microsoft properties.
– Yahoo! is one of only 33 companies to be on both the Fortune 1000 list and Fortune’s “Best Place to Work” List.
– Nearly 30% of US Internet users access video content on Yahoo! each month.
– Yahoo! News is the #1 online news destination and has 39 million users, nearly 6 million more users than its nearest competitor.
– Yahoo!’s home page is the most visited page on the web in the U.S., visited by over half the of the U.S. online population.
– My Yahoo! is the #1 peronslalized start page in the world.
– Half of Yahoo! users are under 35 years of age.
– Yahoo! has nearly 2x as many users as MySpace and more than 3x as many users as Facebook in the U.s.
– Yahoo! Finance users are the most engaged financial audience, averaging 20 minutes per user per month.
– More time is spent on Yahoo! Messenger on average per day than on any other instant messenger service.
– Yahoo! is the #1 mobile Mail & Messenger destination in the U.S.
– Yahoo! Mail is the #1 Web mail provider in the U.S. with 86 million users.