Yahoo Inc’s board seems to be looking for any way possible to escape takeover by Microsoft Corp, but in the end directors’ duty may be simply to take what the software company offers.
Yahoo may be known for its fun-loving culture where employees refer to each other as “yahoos”, dress in loud purple-and-yellow T-shirts and harbour a deep Silicon Valley-bred distrust of rival Microsoft’s corporate culture.
But Yahoo’s 10-member board is far from being some band of Microsoft-hating ideologues that would block a deal with the world’s largest software company at any price.
Too much connection
Most of board directors at Yahoo are drawn from the mainstream of American corporate life, including executives and entrepreneurs from fields such as advertising, airlines, supermarkets and radio.
And in a world of heightened focus on corporate boards, directors are under clear pressure to seek the best deal for shareholders, suggesting their fiduciary responsibility will prevail over any bet-the-farm strategy to remain independent.
A spokeswoman declined to comment on board’s activities beyond a statement rejecting Microsoft’s bid as too low: “Yahoo’s board is carefully and thoroughly evaluating all of company’s strategic alternatives and will pursue the best course of action to maximise long-term value.”
Despite discussions, according to sources, of tie-ups with other companies from Google Inc to News Corp, Yahoo’s directors are not tech radicals who will attempt to go it alone at any cost.
“One way Yahoo has grown up is that they have created a pretty good corporate board,” said a local recruiter familiar with the dynamics of directors. Even directors drawn from the tech world like venture capitalist Eric Hippeau and Robert Kotick, head of video game company Activision Inc, have ties that suggest they won’t oppose a Microsoft deal. The board has days or weeks to decide. A month from now, nominations for board members are due for Yahoo’s annual shareholder meeting. Microsoft could turn hostile and nominate its own candidates as a way of winning support for its deal.
