Outside the Lines

Joe Nocera gives Yahoo CEO Jerry Yang a very public drubbing in his New York Times column, accusing him of shirking his fiduciary responsibilities to shareholders.

Nocera, who writes about financial issues for the paper, concluded:

A takeover by Microsoft was your last, best hope of rewarding your long-suffering shareholders. Now that opportunity is gone. It says here Mr. Icahn is not going to go as gently into the night as Mr. Ballmer did -- and if I were a betting man, I would be taking odds that your days as Yahoo's C.E.O. are numbered.

It'll be better for everyone to have someone in that role who understands who he's supposed to be working for. Wouldn't you agree?

As I wrote Saturday, Yang and his No. 2, Sue Decker, are on a short leash, and will very soon have to explain and show how they are going create shareholder value above what a Microsoft marriage would have delivered. Yang and Decker might be on the right track with the changes underway, but they are now working in a negatively charged environment, with pundits and shareholders lobbing bombs into Yahoo's board room.

Yahoo board Chairman Roy Bostock

(Credit: Duke University)

While Yang is taking the brunt of the criticism, Yahoo's board of directors, led by executive Chairman Roy Bostock, pulled the strings that led to Yahoo's miscalculation in handling Microsoft's bid to acquire the company. It was just about the money. Forget about Yang's bleeding purple, founder's desire to stay independent and antipathy toward Microsoft. For $37 per share Yahoo's board, or less, was willing to sell out. Microsoft's desire for a union faded as Yahoo's board played hard to get, and eventually Gates and Ballmer soured on the whole deal.

Corporate raider Carl Icahn is hoping to bounce the board in the upcoming proxy battle at the annual shareholder meeting on August 1, but that's not likely to bring Microsoft back to the negotiating table.

Yahoo is not on its last legs or unable to articulate a business plan. It's a profitable company with huge assets, but it's hard to look great compared with Google. The messaging has gotten out of Yahoo's control, which has put Yang and company in a perpetual defensive mode.

Speculation is starting about who might be the next CEO of the company if the founder is bounced. It will be someone from the outside who has loads of experience and credibility in running an large media and technology company. And many of the current board of directors will have gone on to other things.