case

Yahoo!Inc. 30-5

12 Jerry Yang, one ofY. ahoo's co-founders, replaced Terry Semel as cEo in 2007. yahoofaced intense competition from Googre in ihe intern"t advertising ,f*" una the two com_panies competed with each other to acquire complementary businesses. A combinationof intensifying competition and the global economic slowdtwn resulted in yahoo,s firstemployee layoffs in earry 200g and a second round at the end of the same year. In 200g,Microsoft made a second bid to acquire Yahoo, after its 2006 bid had been rejected. JerryYang and Roy Bostock (yahoo's board chairman) convinced ,t . "o-pury,s

board to reject

13 :lit",, ffi'I?;ff"':i":,Jff:#J;TJ,St31I"ffi; ;;;*ed wi,h,urningaround the company and toward thaigoal she announced a search engine partnership withMicrosoft' sold several u1!9-+errormirg acquisitions, and discontinue? certain services. Inaddition, Bartz expanded yahoo's gtouit presence by making key acquisitions in regionssuch as the Middle East. Howev"r, yunot,, revenues declined ior the third consecutiveyear in fiscal 2010 and the company announced further emplo; i;;#, to cur cosrs. Bartzwas fired by Yahoo's board in rate 2011 after failing to turn *orrirrr" company. she was

14,.,]ii",ffi ;ii:ilir#.'J,IT,ylTi;Jlffi ffl :H,Lll;f"T,lHll:*L;;; would become the company's new cEo. Thompson,s tenure was short as he was forcedto step down on May 13, 2072, after it was revealed that he had falsif,ed his educationalbackground on his resum6. During Thompson's tenure, Daniel Loeb, who controlled thehedge fund rhird point LLC, became u, u"iiuirt investor atyahoo anJ demanded sweeping

1 s ::Hq ffi i:frlT"ir{,ilffi T::,'"il1"10,," "*".;"*. ;",10".,,,.,0"d downand FredAmoroso became board chairman. yahoo appointed Ross Levinsohn (who headedthe company's media business) as interim CEo and began an intense search for a perma_nent leader. At the Jury 12,2012, annual srockholders,Leeting, o"ri"i Loeb and rwo ofhis nominees were erected to yahoo's board. on July 16, 2012, theboard announced thatMarissa Mayer, a senior executive at rival Google, was to be yahoo,s new cEo. RossLevinsohn' who had fuly expected to be named yahoo', p".-ur"ricEo, ."rigr"d fromthe company after Mayer,s appointment.rr

CORPORATE GOVERNANCE AT YAHOO

The Microsoft Bid 16 on February 1,2008, Microsoft made an unsolicited bid to acquire yahoo by offering (incash and stock) g3l per sharg valuing the company at $44.6Ulttion. yahoo,s stock pricehad closed at $19.18 the previous aay. whenyanoo's board rejected the offer, Microsoftincreased its bid price to $33 per share.12 once again, yahoo rejecteo rrr" ula, demanding$37 per share (valuing Yahoo at $47.5 bilil;j. In a leter to Steve Ballmer, Microsoft,sCEO, offering the rationale for rejecting the bid, yahoo stated:

our Board ' ' ' unanimously concluded that it (the bid) was not in the best interests of yahooland its stockholders. our Board cited yahoo ! 's grobal brand, rarge worrdwide audience,significant recent investments in advertising pruiro.-, and future growth prospects, free cashflow and earnings potential, as well as it, ,iurturtiut unconsolidated investments, as factors

rtKara Swisher' "Exclusive-Ross Levinsohn Departs Yahoo," http://allthingsd. corl20120730las-expected-ross-levinsohn-depalts-yahoo/, accessed May Z, iOtZ. r2"Microsoft

Makes unsolicited Bid for Yahoo," 1y'8 CNEWS.com,www.msnbc.msn .cofii/idt22g47626/ns/business-us-business/t/microsoft-makes-unsoricit"a-iia-vur.,oo, accessed September rg, 2012.