Yahoo: The Price of Victory

AP has a story this morning about an incipient revellion amongst Yahoo! shareholders about the management's refusal to sell the company to MS.

The story relies chiefly on a single interview, with Darren Chervitz, co-manager of an internet-devoted investment fund.

In the final days of negotiations, MS had expressed a willingness to go as high as $33 per share. Yahoo took the position that nothing less than $37 would suffice. Having drawn their lines in the sand, there seems to have been no face-saving way for either side to suggest ... um ... $35?

Anyway, Chervitz would have liked to have had that $35 per share, or even perhaps that $33 per share, and he's unhappy. "There is probably blame to go around on both sides, but I think most of it is in Yang's hands."

The AP story doesn't give any indication of how many shares Chervitz' find owns, or (if it doesn't own enough of a block to cause much fuss at the next annual meeting itself) how representative it is. All we have is the fact that HE is unhappy, and the conclusion that this MAY be symptomatic of a broader rebellion. Or maybe not.

So I did some supplementary research myself. The "Jacob Internet Fund" owns 144,274 shares of Yahoo, which is just a little more than one percent of one percent (i.e. one share out of every ten thousand) of the whole. Not enough to cause much fuss at all.

Yahoo's annual shareholder meeting will be a forum for venting anguish, but there isn't enough time to put forward an alternative slate, so the most anyone can expect to organize is a symbolic "vote no" campaign.

Allow me this anodyne conclusion. If any major shakeup occurs at the top of Yahoo's governance structure as a result of their having successfully spurned MS, I for one will be surprised.

Still: I've been surprised before.