Yahoo Chairman Bostock's Departure Exemplifies Company Problems

 
 
By Chris Preimesberger  |  Posted 2012-02-09
 
 
 

When former Yahoo CEO Jerry Yang left the company he co-founded on Jan. 17, industry folks in the know realized it was only a matter of time until board chairman Roy Bostock followed him out the door. That day has come.

After Bostock and three other board members resigned Feb. 8, the company said it appointed former IBM executive and Rovi Corp CEO Alfred Amoroso and former eBay COO Maynard Webb as independent directors. A new board chairman is expected to be announced within the next few weeks.

Bostock and his colleagues became the latest long-time members of the leadership team to leave the company in a protracted shake-up at the venerable but beleaguered Web search and services company as it regroups to regain investor confidence.

And confidence is a major ingredient lacking in the company makeup at this time.

For about seven years, Yahoo ranked as the world's No. 1 Internet search engine. However, Google bypassed it in general usage in about 2002. Facebook, Twitter and other social media services also have taken page views from Yahoo, which is still the No. 2 search provider and whose Yahoo Mail is the world's leading Webmail application.

Yahoo's search engine never has been able to work as quickly or as efficiently as Google's, and it has paid a steep price for being surpassed. It also has not been able to get as much traction as Google and other Web service providers on features such as Web documents, collaboration tools, calendaring, texting and others.

Four CEOs Since 2007

Bostock's departure comes a month after former Paypal head Scott Thompson was named CEO on Jan. 4. Thompson replaced deposed former Autodesk CEO Carol Bartz, whom Bostock fired in a phone conversation in September 2011 after two years on the job as chief executive officer.

Since 2007, the Sunnyvale, Calif.-based company has had four CEOs: former Warner Bros. Chairman and co-CEO Terry Semel (2004-2007), Yang (2007-2009), Bartz (2009-2011) and now Thompson. Semel resigned in 2007, with Yang replacing him.

Bostock and Yang were vilified by a number of vocal shareholders, led by maverick investor Carl Icahn, in August 2008. This happened at the company's annual meeting in San Jose after Yahoo turned down a $47 billion Microsoft acquisition bid that had been tendered five months earlier. But Yang, Bostock and a majority of the board members were against it, and they convinced a majority of shareholders to vote it down.

Microsoft later returned with a smaller offer to buy Yahoo's crown jewel€”its Internet search business, second in size, scope and income only to Google. But Yahoo, again led by Yang and Bostock, also turned that offer down.

Yahoo's common stock in July 2008 was selling for about $23 per share and had been as high as $33.63 in October 2007. The stock closed at $16 on Feb. 9.

Chris Preimesberger is eWEEK's Editor in Chief of Features and Analysis. Twitter: editingwhiz

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