The Wall Street Journal has struck a nerve at Yahoo with a story today that quotes several investors who say co-founder Jerry Yang is trying to reassert his power at the company by undermining the board’s effort to find a buyer. “News reports based on rumor and speculation are just that,” the company says in a statement. “Mr. Yang is one of 9 directors with the exact same fiduciary duties and motivation as all of his fellow directors — to serve the best interests of all the company’s shareholders.” The WSJ story says that as former CEO and now a major investor and board member, Yang’s ”multiple hats have raised questions both inside and outside Yahoo about whether he can act in the best interest of shareholders rather than from a desire to preserve his influence and legacy.” It quotes a letter sent today by Daniel Loeb, who manages the Third Point LLC hedge fund, a major investor in Yahoo, calling on Yang to resign. He cited Yang’s “ineptitude” in 2008 when he was CEO and rejected Microsoft’s $45B offer for Yahoo — which now has a market value of $19.2B. Loeb said he would fight a “sweetheart” to sell Yahoo to a private equity firm. The story also quotes Peter Schoenfeld of P. Schoenfeld Asset Management LP, who says that the ”board should be focused on unlocking [Yahoo] value for all shareholders instead of protecting a small group.” Yahoo has been trying to find its way since September …
The business world would be a lot more fun if every fired CEO responded to the news the way Carol Bartz has. “These people fucked me over,” the former Yahoo chief tells Fortune in a story on the magazine’s website. Bartz says that chairman Roy Bostock dropped the ax in a Tuesday night phone call where he began by reading a statement prepared by a lawyer. “I said, ‘Roy, I think that’s a script,’ ” Bartz said, adding: ”‘Why don’t you have the balls to tell me yourself?’ ” When he was done she said, “I got it … I thought you were classier.” Bostock gave her two hours to decide if she would resign or be formally fired, and Bartz learned that Yahoo had sent lawyers to the St. Regis hotel in New York to seal the deal. She avoided them by moving to another hotel — and disclosed the news via email to Yahoo employees.
Here’s a deal that would reshape the online streaming business and set Netflix on its heels: Apple is “considering making a bid” for Hulu, Bloomberg reports today citing two people “with knowledge of the auction.” The story says that Steve Jobs’ company is “in early talks that may lead to an offer” which could come to more than $2B. But what’s just as interesting is that Disney, News Corp, and Comcast’s NBCUniversal are said to be telling all bidders that they’re prepared to continue providing programming to Hulu for five years — including two with exclusivity. Companies looking at Hulu have said that it would be hard to put a price tag on it without guaranteed programming. Now several are at least kicking the tires for the auction being run for Hulu by bankers Morgan Stanley and Guggenheim Partners. Yahoo is known to be interested. CEO Carol Bartz wouldn’t comment on Hulu when asked about it in a conference call with analysts on Tuesday. Amazon, Google, and Microsoft are also looking closely — although Bloomberg says that Microsoft’s interest is waning.
UPDATE: Disney CEO Bob Iger’s strategy thus far has been to promote from within. But he went outside for executives to run Disney’s interactive gaming, social networking, online content, and web and mobile group which he has been expanding recently with $1 billion in acquisitions to position the company on those platforms. Iger decided to split the top job of president: he announced today that Yahoo VP of Media Jimmy Pitaro will Co-President the Disney Interactive Media Group with John Pleasants who also continues as CEO of Playdom, the fast-growing social games publishing company recently acquired by Disney earlier this year for up to $763 million. Pleasants, who won’t be headquartered in Burbank, also will get involved with another recent Disney acquisition, the mobile publisher Tapulous. The moves come simultaneously with Steve Wadsworth exiting Disney Interactive last week. Pitaro was the boss behind three heavily trafficked parts of Yahoo: news, sports and finance and will continue overseeing content at Disney including Disney.com marketing, DigiSynd, advertising, and non-gaming mobile content. Pleasants will head gaming including mobile gaming. Among the name assets Pitaro and Pleasants will be guiding are the popular virtual world Club Penguin site (acquired before Disney interactive and gaming divisions were combined) and interactive Disney-branded sites like Fairies, Pirates of the Carribean, Toontown Online and The World of Cars Online. (See Disney announcement below.)
Yahoo’s controversial and annoying CEO Carol Bartz has talked about stability and marketshare and branding ever since she joined the portal giant back in January 2009. She may want to focus on staff retention instead. Three of the company’s top executives have bolted: besides the well-liked Pitaro, the other two Yahoo escapees are EVP of sales Hilary Schneider and North American mobile ops head David Ko. The fleeing couldn’t have happened at a worse time for Yahoo which is already in the middle of a major culture shift as it transfers all of its search capabilities to Microsoft’s Bing, which in turn is having a tough time vs. Google. Though this executive defection occurred on Bartz’s watch, the problems at Yahoo began with Terry Semel and kept going though Jerry Yang (who co-founded the company and took back control for awhile.) What’s worse, Yahoo’s stock has dropped about $15 this year. So for all the cost-cutting and bravado Bartz has introduced to the company, it doesn’t look like any of it is paying off. Then again, she only has 18 months left on her contract right now.
BURBANK, Calif., October 3, 2010 — John Pleasants and James Pitaro have been named Co-Presidents, Disney Interactive Media Group (DIMG), it was announced today by Disney President and CEO Robert A. Iger.