Yahoo Corporate Governance in Microsoft Takeover
Yahoo Corporate Governance and the Microsoft Takeover
We are studying the potential buyout of Yahoo by Microsoft from the perspective of Yahoo’s Board of Directors. Yahoo! Inc. provides Internet services to users, advertisers, publishers and developers worldwide. It offers online properties and services to users; and marketing solutions and tools to advertisers and publishers. For example, Yahoo! Finance is a portal for information on general financial conditions and specific firm information. It is also the second largest internet search engine on the planet, behind Google, which is also their main competitor. Jerry Yang, 39, is Co-Founder, CEO, Chief Yahoo! and Executive Director and Susan L. Decker, 45, is President. Yahoo!, a Delaware corporation, was founded in 1994, went public in April 1996 and is headquartered in Sunnyvale, California.
The Yahoo! board’s recent actions will be evaluated based on whether by blocking a hostile takeover bid from Microsoft, it considered what was in the best interest of the corporation and its shareholders. The business judgment rule usually prevails in a situation like this one where there is a “presumption that in making a business decision the directors of the corporation acted in an informed basis, in good faith and in the honest belief that the action was in the best interests of the company.” . We know that the Yahoo! board was permitted to use defensive measures like the poison pill employed based on the legal precedence set in the Revlon case. The board of directors needs to act as a disinterested party and not breach other aspects of its fiduciary duty. There should be a reasonable benefit accruing for the company’s stakeholders even as the board of directors considers the interests of other constituencies as originally stated in the Unocal case and reaffirmed in the Revlon case. If however Yahoo! was clearly for sale to Google or another party after the Microsoft bid then the Yahoo! board has to become an
We are studying the potential buyout of Yahoo by Microsoft from the perspective of Yahoo’s Board of Directors. Yahoo! Inc. provides Internet services to users, advertisers, publishers and developers worldwide. It offers online properties and services to users; and marketing solutions and tools to advertisers and publishers. For example, Yahoo! Finance is a portal for information on general financial conditions and specific firm information. It is also the second largest internet search engine on the planet, behind Google, which is also their main competitor. Jerry Yang, 39, is Co-Founder, CEO, Chief Yahoo! and Executive Director and Susan L. Decker, 45, is President. Yahoo!, a Delaware corporation, was founded in 1994, went public in April 1996 and is headquartered in Sunnyvale, California.
The Yahoo! board’s recent actions will be evaluated based on whether by blocking a hostile takeover bid from Microsoft, it considered what was in the best interest of the corporation and its shareholders. The business judgment rule usually prevails in a situation like this one where there is a “presumption that in making a business decision the directors of the corporation acted in an informed basis, in good faith and in the honest belief that the action was in the best interests of the company.” . We know that the Yahoo! board was permitted to use defensive measures like the poison pill employed based on the legal precedence set in the Revlon case. The board of directors needs to act as a disinterested party and not breach other aspects of its fiduciary duty. There should be a reasonable benefit accruing for the company’s stakeholders even as the board of directors considers the interests of other constituencies as originally stated in the Unocal case and reaffirmed in the Revlon case. If however Yahoo! was clearly for sale to Google or another party after the Microsoft bid then the Yahoo! board has to become an