Yahoo's board is under attack, the latest headache for Marissa Mayer
A former Google executive who took the helm at Yahoo in 2012, Mayer has been criticized for a number of moves she's made to bring Yahoo back to relevance, so Starboard has plenty of ammunition.
Just look at Yahoo Screen, the company's premium video service, which was shut down in January. Yahoo admitted it couldn't find a way for the service to make money, even with the help of newly produced programming including a revival of the NBC cult comedy "Community." The company admitted the slate of shows sucked up \\$42 million from its coffers.
That's just one of many missteps that has highlighted Yahoo's failed efforts to keep up with rivals like Facebook, Google and Snapchat. Yahoo still has a large audience -- it claims 1 billion people visit all its sites combined per month -- but it hasn't found ways to make that pay, and it hasn't been able to find a sure footing with its products.
Its messaging service Livetext, a video chat app but with no sound, was shut down eight months after it launched. And 8 of the top 10 smartphone apps in the United States in January are made by rivals Facebook and Google, according to Comscore. Yahoo's only spot on the top 15 is Apple's Stocks app for iPhones, powered by Yahoo's financial data.
The missteps have sunk morale, with key executives leaving and Mayer apparently asking the remaining leadership to make multiyear commitments to the company.
"Unfortunately, as we have outlined in previous letters, we have been extremely disappointed with Yahoo's dismal financial performance, poor management execution, egregious compensation and hiring practices, and general lack of accountability and oversight by the board," Starboard wrote in its letter. "We believe the board clearly lacks the leadership, objectivity, and perspective needed to make decisions that are in the best interests of shareholders."
Yahoo said its Nominating and Governance Committee will review the proposal and "respond in due course." Starboard didn't respond to a request for comment beyond its letter.
This isn't the first time Starboard has tried to force a company to clean house. In 2014, Darden Restaurants, the owner of Olive Garden and other chains, replaced its entire 12-person board after pressure from Starboard. As part of its campaign, Starboard published a presentation filled with embarrassing critiques of the restaurant chain, including its poor preparation of fried lasagna bites or its failure to add salt to water when making pasta.
Now it's trading in unlimited salad and breadsticks for, well, whatever Yahoo is focusing on now.
The investor group, which said it owns 1.7 percent of Yahoo, wants to nominate its nine board replacement candidates at Yahoo's annual shareholder meeting later this year. Those candidates include Jeffrey Smith, Starboard's CEO, and Eddy Hartenstein, chairman of Tribune publishing, which owns the Chicago Tribune, LA Times and Baltimore Sun.
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