Yahoo shareholders buckle down

Microsoft, China, Google among discussions

SAN JOSE, Calif. -- A missed opportunity to sell to Microsoft, outside board commitments of president Sue Decker, its competitive position vis-a-vis Google and Yahoo's conduct in China were among key focus areas of shareholder questions at Yahoo's annual meeting here Friday.

One shareholder earned applause from the crowd when he said the Yahoo board has overpaid for executive compensation, overplayed its Microsoft hand and has overstayed its welcome.

"It's nice to see you again," CEO Jerry Yang started his reply, getting some laughs.

Chairman Roy Bostock repeated an earlier comment, in which he highlighted that Microsoft never made a compelling bid at a fair price, even though Yahoo was open to such a move.

Another shareholder argued that he was reminded of stories of a breakup when listening to Bostock. Microsoft reminds him of "the strong silent type," he said, while Bostock "is going around playing the part of saving face." Yahoo seems like a person who after a breakup tries to convince people she initiated the breakup, he concluded.

Another shareholder drew applause by criticizing Microsoft as a bully, though, saying: "My support is for this board."

Meanwhile, Yang defended president Decker's sitting on three outside boards, which a shareholder criticized may distract her from her main job.

Decker herself she is learning valuable lessons in her board jobs at three blue chippers. Costco is "one of the best executers, and I learn a lot from that," she said, adding Intel is a tech leader, and Berkshire Hathaway a powerhouse that also allows for great learning. "My first commitment to Yahoo" is always her focus though, she said.

Another exec also defended Deckler, saying 3am emails from her are a common thing.

Yang also faced a question about Yahoo's willingness to compete with Google in the online search space.

"It's been an important investment and very worthwhile for our investors," he replied, adding he feels Yahoo is starting to somewhat close the gap to Google.

"We're not satisfied with our current productivity goals," but are building new infrastructure to better compete, he said.

Yahoo's conduct in China, which in the past has been a topic of criticism, was also a key topic.

And Yang said his team is committed to human rights in the Web space.

"We think Yahoo without a question is a leader now in Internet human rights issues," he said, adding that Yahoo is not supporting the Chinese government's blocking Web sites "and of course hurting people" by limiting Web freedom.

Yang also pointed to an internal task group to measure Yahoo's human rights performance and its push for an industry code of conduct. "We can help move the needle, even with lawmakers," he said. "In the end, this is an issue for our State Department," which he said he feels is doing a good job dealing with China.

The meeting ended after about two hours and 15 minutes, including about 45 minutes of Q&A.
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