Yahoo Skewered

At Seeking Alpha there’s a post titled Yahoo!: Time for Plan B that tears apart Yahoo CEO Terry Semel and the organization’s lack of strategy. One thing the post calls for is not only Semel’s resignation or firing, but the replacement of 6 other Board members.

Terry Semel, Robert Kotick, Roy Bostock, Ron Burkle, Eric Hippeau, Arthur Kern and Gary Wilson should be Immediately Replaced on Yahoo!’s Board of Directors. Terry Semel ultimately reports to Yahoo!’s board of directors. The board must be held accountable for the numerous missteps outlined above. Of the 10 directors, we believe 7 should resign or Yahoo! shareholders should withhold votes for them at Yahoo!’s 2007 annual meeting of shareholders.

I’m not saying Yahoo’s performance has been anything to write home about but a) Yahoo has historically had good corporate governance and b) there are a bunch of buy ratings on the stock based on the expected success of Panama. With regard to governance, the Institutional Shareholder Services (ISS) Corporate Governance Quotient (CGQ) rates Yahoo as outperfoming 65% of the of the companies in the S&P 500 and almost 98% of the companies in the Software and Services group. Specifically, from the most recent CGQ report on Yahoo:

• The board is controlled by a supermajority of independent outsiders (independent outsiders greater than 67%)
• The nominating committee is comprised solely of independent outside directors
• The compensation committee is comprised solely of independent outside directors

Most of the other board specific practices of Yahoo! are rated positively. As far as sell-side research is concerned, here are some of the most recent headlines:

From RBC: Panama Transition Smooth, Raising Estimates For 1H07
From Jefferies: Solid Q + Panama Launch Date to Offset Conservative Guidance; Reiterating Buy
From William Blair: Yahoo: Seamless Transition to “Marketplace Design” so Far

Clearly, Yahoo! has not performed recently. But the complaints about governance seem too harsh and Panama should yield some improvement. So maybe the timing for a big change isn’t exactly right.

Weighing in at 400+ Pages…Safa Rashtchy of Piper Jaffray

Last week Piper Jaffray Senior Research Analyst Safa Rashtchy and team published one of the largest and most comprehensive investment research reports in recent memory: 425 pages of charts, tables, stocks to watch, information on ad agencies…it’s overwhelming. The User Revolution: The New Advertising Ecosystem and The Rise of the Internet as a Mass Medium introduces Piper’s concept of “Communitainment,” the combination of the internet as a medium for community, communication and entertainment.

The Piper team “expects global online advertising revenue to reach $81.1 billion by 2011, representing a 21% CAGR (2006-2011).

The press release for the report can be downloaded here, and there’s also an 8 page executive summary (3 pages of disclosures) available; the full report is available from Piper Jaffray. The graphic seen here is part of the executive summary with the caption: “In this new media reality, companies will need to own or partner with many channels to be omnipresent with users, forcing media companies to cooperate much more on standards, realizing that the user is king.”