As Long As We Are Rethinking Yahoo's Board

Carl Icahn has suggested a new slate of directors for Yahoo! as part of his proxy fight with the company. The International Herald Tribune has a list of the current ten directors and Icahn’s proposed slate. The morning Icahn’s slate was announced I was a bit irritated by the whole thing and expressed my irritation on twitter. David Dalka replied with the obvious question – If Icahn’s slate is no good, who would you propose?

So I’ve been thinking about this for the past several days. First I think the current board must take some responsibility for where Yahoo! finds itself now. It probably is time for a little housecleaning. But Icahn’s slate doesn’t include many people with real internet business experience and only one or two with any idea of where the internet is headed. But the biggest problem with Icahn and his slate is that it’s all a game to get control of the company and sell it to Microsoft, a transaction that neither company apparently wants to do anymore. An even more cynical view is that Icahn and his slate just want to be bought off with greenmail of some sort.

I have been saying since the start of this whole Yahoo/Microsoft thing that what Yahoo! needs is to get smaller, leaner, and more focused. And I think they should partner in some way with Google to increase the monetization of their search without giving up on their own search platform entirely. I like some of the moves they are making to open up the entire Yahoo platform and let others build applications, services, and companies on top of it.

So with that proviso, here’s my suggested slate of directors. None of these people have any idea I am going to mention them in this post and I suspect few, if any, would agree to serve if asked.

Roy Bostock, Chairman – Because I think he’s doing a good job right now and he seems to be a strong leader of the board.

Jerry Yang, CEO – I am not sure Jerry should be CEO long term, but I think he’s got the company moving in the right direction. And as a founder, he should be on the board regardless if he remains CEO.

Bill Gross – Instead of putting someone like Mark Cuban who sold his company for billions to Yahoo! and then turns around and participates in a hostile action against them, I would put Gross on because he also sold a company, Overture, to Yahoo! and because he invented paid search and he always has great ideas for new business models.

Marc Andreessen – Apparently Marc is joining the Facebook board. It’s too bad Yahoo! didn’t ask him to join their board. When you talk about opening up a platform and allowing people to build social apps on it, Marc is doing just that. If Marc won’t do it, then someone like Dave Winer would be a good choice for similar reasons.

Mike Moritz – Because he’s the best Internet investor ever and because the stock is about the same price it was when he left the board in the middle of 2003.

Tim O’Reilly – Because Tim is one of best thinkers about where the web and technology is headed and because if Yahoo! truly wants to be open, Tim can help them think about how to do it right.

Nancy Peretsman – Because Nancy is one of the sharpest media bankers and she knows the Internet and the players like the back of her hand. And because Yahoo! is going to be in play for a while even if this Icahn thing goes away and they need someone like Nancy on the board.

Yochai Benkler – Because Yahoo! is a network at its core and nobody has thought more deeply about the role of networks in society and the economy than Yochai.

Mike Walrath – Because Right Media’s is one of the most interesting acquisitions that Yahoo! has made in recent years and because Yahoo! can use Right Media to build the dominant exchange for display advertising, a market position in display that could rival what Google has created in keyword.

Another entrepreneur who has recently sold their company to Yahoo! – Someone like Joshua Schachter or Stewart Butterfield or Caterina Fake or Eric Marcoullier or Al Warms or Satish Dharmaraj. Because entrepreneurs are often closest to the pulse of where things are heading. And because Yahoo! needs to do a better job leveraging the acquisitions they make and these people know what Yahoo! is doing right and what it is doing wrong with its acquisitions.

So that’s my slate. The fact is that other than Ray and Jerry, it would be hard, if not impossible, to get most of these people interested in doing this. Public boards are hard work and fraught with liability. Imagine if you were on Yahoo!’s board right now. Ugh. But regardless of what happens, if Yahoo! stays independent, they should start churning their board and this list would be a good place to start the search.

Feel free to leave suggestions or entire slates in the comments or post your own slate and leave a link in the comments. I will add all links to other slates to the end of this post.

#VC & Technology

Comments (Archived):

  1. Shripriya

    I completely agree that Yahoo needs to get smaller and more focused. But I would add that you need someone who has the experience at running a really large company to know how to get to the new size and focus. Jerry hasn’t really “run” Yahoo as a large company and what he’s done in the past year has not been impressive. One recommendation would be Meg Whitman – she knows what it takes to run a large company. She’s seen the upside and downsides of it. She’s not super-technical, but she gets the internet space and the strategic landscape. She’s a tough fighter and able to make very hard decisions. With her giving up the CEO position at eBay, she’s less conflicted, but may still be too conflicted given the continuing eBay connections. One of her favorite quotes is “We manage a company, not a stock price”. That could not be more true in this situation.Mike Moritz has already spent time on the board and as you said, it is unlikely he’d go back. Why not replace one VC with another who’s sold lots of companies to Yahoo and spends serious time thinking about the landscape? 😉

    1. curmudgeonly troll

      Ummh… eBay has disappointed users worse than Yahoo…have you noticed it’s no longer possible to sell anything on eBay?…Can anyone explain why it should take me longer than a couple of hours to sell an Xbox on eBay. Instead it takes 1 month and multiple hassles with scammers? I have a closet full of stuff I’d sell if it was worth the effort.eBay is fortunate the barriers to entry are much higher and they haven’t been targeted by a fierce competitor… but I think if Google (or a Fred-funded startup) put out a distributed auction system so I could sell stuff on my site and simultaneously Facebook etc. eBay could be in trouble before long.

  2. Howard Greenstein

    So you’re not interested in serving?

    1. fredwilson

      no, i have responsibilities to my investors. as do most of the people on my list.

  3. dcostolo

    Walrath should be the new CEO there. He understands the future of advertising, how to compete in markets where you do and don’t have leverage, and how to attack from the flanks. He’s the person on the inside of that company that could step in and run that business at scale. I would replace any one of the other suggestions with somebody who has turned a company around. This strikes me as a unique skill, and while it’s a stretch to call yahoo! a “turnaround”, i think you know what I mean. It needs a Gerstner type who can come into a successful but struggling environment and change the rules while everybody else is saying “we don’t do things that way here”. Having said all this, I agree completely that Icahn’s proposed slate is a transparent collection of yes men to his wishes to flip this thing quickly or profit from the effort to displace the existing board.

  4. edythe

    good list. in particular i like the inclusion of Caterina Fake, Bill Gross, and Tim O’Reilly.

  5. Nate Westheimer

    Great list, Fred.I’ve started a People’s Choice BricaBox for this:http://yahooboard.bricabox….

  6. PKafka

    Natalie Bancroft. But mostly because I’m trying out Disqus. Don’t feel that strongly about it: Can someone tell me when a board has had a significant *positive* effect on a large public company?

  7. Steven Kane

    great list fredmight quibble with one or two names but minor quibbles reallysome other candidatesRoger McNamee – visionary macro thinkerCarl Icahn – if you’re in shark infested waters, maybe you need the biggest shark to protect youJeff Bezos – nobody but nobody has seen or done more in the interactive media or experienced higher ups and lower downs as public company etcGordon Crawford – no idea if we would or could do it, but sharehodlers viewpoint will be totally honestly covered and protectedmore to come (maybe)

    1. fredwilson

      good suggestions stevei think we should also consider our mutual friend Seth Godin who also sold his company to Yahoo!fred

  8. GL

    First Team:Add: John Chamber’s access to global 2000 companiesRemove: Mike Moritz (yes, he’s the best). Put simply don’t understand how a VC can add value to a public board when their core job description is to chase down new small investment deals and nurture small private companies.Second Team:Add: Carlos Slim: “OWNS” all of Latin America. Access to mobile assets will become extremely valuable as the next great platform is wireless. Oh a, he’s also globally connected and pretty smart.Add: George Reyes; when he retires from GOOG. Will be a free agent.Who better to draw up a financial roadmap!!!

  9. Erik

    I think your list needs a few more people with actual CEO operating experience at an important internet company. More Walraths and less O’Reillys. Any smart person can come up with good ideas, few have the ability to execute them, or more aptly in this case to know whether they can be executed and provide insight and oversight on how. As long as this is fantaty, take out O’Reilly, Benkler and Peretsman, and add Larry Ellison, Meg Whitman and Steve Case.

  10. Alexander Muse

    Don’t be frustrated. If Yahoo had actually sought the involvement of “Someone like Joshua Schachter or Stewart Butterfield or Caterina Fake or Eric Marcoullier or Al Warms or Satish Dharmaraj.” they wouldn’t find themselves the target of Carl’s efforts. Assuming Carl can pull it off, Microsoft HAS agreed to buy the company so the slate of directors won’t matter a lick.

  11. Mark

    Agree with most of your thoughts except this one:”And I think they should partner in some way with Google to increase the monetization of their search without giving up on their own search platform entirely.”Obviously that’s a short-term revenue gain, but it seems like a death knell longer term.

    1. fredwilson

      i am not sure about that. let’s say they pick 20% of the keywords that Google monetizes the best and they do a two year deal around those. that doesn’t mean they don’t continue to invest in their own platform

  12. Henry Blodget

    I don’t know about Roy Bostock, Fred. I really feel like he blew the Microsoft negotiations. Jerry’s obviously emotionally tied to the company, but Bostock seemed to be AWOL (including at that last meeting before Microsoft walked). But in any event…I’d put Ellen or David Siminoff on there. Maybe Tim Koogle. Someone who has known the company and industry intimately from the beginning and was around when it was great. And, for a truly fresh perspective, Mark Zuckerberg.

  13. dave

    Another thought — maybe Yahoo ought to issue a dividend to its users, all stock, no cash. Just to get us thinking about ways to make them successful. I’ve always wondered what would happen if one of these companies really gave their users equity. Of course I am not a lawyer, and have no idea if this is legal or if it would create a huge tax problem or whatever.

  14. howardlindzon

    no monkies?

  15. Rolest

    Yahoo! has too much competition with Google. Yahoo! needs a big partner like MSFT if it is to survive. Playing with Google was just a chess move against MSFT. If they truly partner with Google in any way, the antitrust fellows are going to be down their neck in about 10 minutes, and even if it did happen, Yahoo! would soon be renamed Yahgoo!

  16. Jay

    Fred:This list is horrible. A random selection of 500 business people culled from the phone book would do better.

  17. gregory

    isn’t ichan the guy who screwed twa? strange, who the heroes of the business world are

  18. Steve Poland

    You lost me at Dave Winer.

  19. Victor

    Here’s my board:- Jeff Bezos- Eric Schmidt- Steve Jobs- Barry Diller- Peter Thiel- Mark Cuban- Pierre Omidyar- Carl Icahn- Larry Ellison- Henry Blodget(the last was is subject to consideration based on the quality of his future analysis 🙂

  20. db

    I think your slate is much better than what Icahn has suggested. His slate is a joke and definitely not intended as a long-term board or one that would consider the long-term health of the company should MS choose to stay away.I would also include the following in any list of potential board members: Andy Bechtolsheim, Steve Jobs, Mitch Kapor, and Johnathon Zittrain. Each have geek creed and bring a variety of different tech and business experience with them.

    1. fredwilson

      i thought about Jobs for my list but then i realized he doesn’t get the internet

      1. db

        True, but he gets how to evolve an iconic brand and make it more iconic.

  21. JoeDuck

    So this is the WHO’s Yahoo board plan, right? “Meet the New Boss, Same as the Old Boss!”Neither Icahn nor MS will approach this with Jerry in power. The hostility goes both ways and the differences are not reconcilable. If you think MS should take over Yahoo you can’t leave Jerry in power or the conflict would be too threatening to all concerned.

  22. Joseph

    Icahan is not stupid. I am sure he already discussed this wish MSFT and I am sure MSF Tis willing to buy it at 33 or less. Basically what msft did is outsource the dirty work of replacing the board members without costing them a penny and hassle.Just because MSFT doesn’t come out and say we will buy it once Icahan implemented a new borad, it doesn’t mean they are not interested. Remember, MSFT needs Yahoo to have a slight chance of fighting Google.

  23. Ethan Bauley

    The Yochai Benkler suggestion was brilliant. I’d add that John Seely Brown or John Hagel would be equally effective in that role.I’ve heard many say this (including Obama), but the greatest risk for many people/organizations these days is…not taking enough risk.

  24. DanRunion

    What’s funny is that I can’t tell you the last time I was on anything Yahoo! related.

  25. Antman

    Ya know, this one got me thinkin’!I don’t now if I agee or disagree with the actual list, but what I do know is I dig the context for HOW ya think about putting a board together. Board developement and member recruitement at high-profile companies seems to be somewhat of a popularity contest rather than serious commitment to corporate governance.Boards can provide tremendous value AND should be credited with providing measurable value in the success of an organization, unfortunately it seems that few board selection processess operate from the same philosophical foundation you do.BTW: I like the Jobs suggestion, there is something to be said about someone who’s vision makes him a billionaire, in two different industries. He’s got good vision, internet or not. And besides, the lack of experience can be an asset.