Semel to shareholders: Yahoo transitioning
EmptyNEW YORK -- Yahoo Inc. chairman and CEO Terry Semel defended his company's position during an often-contentious shareholders meeting Tuesday, saying that his embattled Web portal is in a good position as the Internet continues to evolve.
As Yahoo has seen its perceived profile fade in the past year, rival Google Inc.'s prominence -- with its YouTube and DoubleClick acquisitions -- has risen. One questioner at Tuesday's meeting in Santa Clara, Calif., said that Semel should apologize for his company's performance, then asked if he still had "the fire in the belly" to run Yahoo.
"Absolutely," Semel responded, adding that his company is going through a transition, as is the rest of the digital world. He reiterated that advertising is the main driver of the business and that Yahoo's Panama ad placement system should prove to be successful and highly profitable this year.
"Yahoo will definitely get a fair share of a much larger marketplace," Semel said. "Before we had Panama, we couldn't compete effectively."
During the 2 1/2-hour meeting, Semel tried not to mention Google by name, even though one shareholder asked specifically about the company. He said instead that Yahoo should be compared to Microsoft Corp., Time Warner Inc.'s AOL unit or "50 other companies" and that it was more important to analyze the portal's performance internally.
"The kind of content and the kind of product that Yahoo has and the amount of users and the amount of time spent is a different model than one of the companies you pointed out," Semel said. "Our basic business is advertising."
When the shareholder responded that it sounded as if Semel was happy to be a "strong No. 2" in the search category, the CEO shot back that the shareholder was "being a little cute."
Amid the criticism, Semel and the rest of Yahoo's board of directors were re-elected with 66.6% or more of shareholders approving each board member. That was down sharply from the 97% approval at last year's meeting.
Also at the meeting, 62% of shareholders rejected a proposal to tie senior executive compensation to the company's performance in relation to competitors like Google. Semel reportedly took home $70 million last year even as Yahoo stock dipped 40%.
Responding to a later question about Yahoo's deal strategy, which has been criticized as too careful, Semel said that he looks at potential acquisitions all the time and his mantra for the past six years has been "buy, build or partner." Semel, however, declined to mention any specific potential takeover targets.
Shareholders at the meeting in Santa Clara, Calif., also overwhelmingly defeated a proposal that would have seen Yahoo adopt an anti-censorship policy on the Internet and another one that would have established a human rights committee to review the company's policies in the world. Both would have had big implications for Yahoo's dealings with China, according to observers.
Yahoo has come under fire for turning over Chinese dissidents' e-mails that were then used to prosecute them. The company maintains that it must respect the local laws of the countries in which it operates and that it was unaware of how the Chinese government would use the e-mails.
Reuters contributed to this report.