His job was to do what was best for shareholders, not his employees and definitely not himself. Tough to argue that turning down $33 for the current $15.50 was best for shareholders.
Tough to argue that turning down $33 for the current $15.50 was best for shareholders.
Well it's not always that simple. Hindsight is of course 20/20, but at that time he may have thought that Yahoo was worth more than $33 and/or had a plan to get them there. Oddly enough, the MS offer could be used to help prove his point. Here is an outside company offering to buy Yahoo for much more than the current price so there is definitely value here that they were not leveraging.
With Yahoo up 3% on the news it'll be interesting to see what the future holds.
Pretty much any offer to acquire a significant public company is going to be made at a significant premium to the share price at the time of the offer. Saying MS offered to acquire at a significant premium reduces to saying merely that MS made an offer to acquire.
The fact that MS made an offer to acquire at all helps make Yangs argument regardless of price. There is so much talk of fiduciary duty while ignoring that MS has the same duty to its shareholders. MS must have seen value in Yahoo at that time and offered a significant premium rather than wait for Yahoo to continue to fall and possibly get picked up by someone else. Or perhaps before Yahoo turned the corner and became too expensive for MS to buy.
Just because the company might fit into Microsoft's road map at $33/share doesn't mean it fits into anyone else's. Microsoft needed portals it could use to draw eyes to perennially flagging MSN, and Yahoo has some really popular pages (Yahoo sports, weather, and finance - really the most valuable part of the company) that would have fit nicely.
I doubt Yahoo would have ever been worth that price to Microsoft, but even if it was, the offer doesn't necessarily mean Microsoft expected Yahoo could flourish or even survive as an independent company. I doubt too many people can cogently sum up what Yahoo does, and I'm not sure any of them work for Yahoo.
The law mostly. Otherwise ownership of companies would be mostly pointless, similar to that of gambling (in that your fate would be mostly random, more so then it currently is).
Your statement about the law is for the most part not true. There's a much more in-depth discussion of this at this older HN posting: http://news.ycombinator.com/item?id=3227980
I agree with you that yahoo should have sold to microsoft, by the way. But the legal duty to maximize value bit is just not accurate.
Says the fact that he was on the board of directors of the corporation (emphasis on the fact that it's a public corporation consisting of shareholders).
Legally, in his role, his responsibility was to the shareholders first.
Directors solely have a responsibility to the corporation. The corporation has a responsibility to the shareholders.
This gets mucky on boards of publicly traded boards because large shareholders can be directors and may have divided loyalties. There are strong conflict of interest policies, requirements of care and so on that are intended to help manage this, but it can be a tough balancing act.
I've served on corporate boards and it can be a tricky place to serve in the interest of the organization, balance all of these requirements and stay true to your own personal sense of purpose. Its also very rewarding work and I recommend it highly to anyone that has the opportunity to participate, even for smaller organizations, non-profits, etc.
I think that was said from a shareholder/owner perspective. Microsoft's offer was for more than double Yahoo's current price per share, and that was 4 years ago.
A CEO has fiduciary responsibility for the property of the shareholders. A CEO can have other perspectives if he or she wishes, but the shareholder perspective better be high on the list.
Technically, a CEO doesn't have fiduciary duties. The board of directors does, and the CEO runs the company/reports to the board. I know what you mean, of course.
You know what, beatle is right, I'm wrong. Not sure when or how I developed the misconception, but I'm sorry for speaking outside my area of expertise and blowing it.
Sorry, I don't know. I think that's the case for all public companies in the US, at least (I don't know if it applies to limited parterships, private corporations, s-corporations, etc). I searched to confirm CEOs were not necessarily fiduciaries before I posted, and I did see that officers could be fiduciaries (eg, for internally managed pension funds - though it didn't have to be the CEO).
name companies acquired by Microsoft when microsoft already had competing products, which ended up well for both parties.
honest question. I have to believe there are a couple. and i'd like to know about.