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Loeb Says He'll Fight Yahoo as Long as It Takes

Wednesday, 9 May 2012 | 7:39 PM ET

In rare public comments about his ongoing proxy fight with Yahoo, Third Point founder Dan Loeb called the company “bloated” and “not focused,” but added that the tech giant is a “great business” capable of being turned around.

Yahoo!'s headquarters in California.
Paul Sakuma
Yahoo!'s headquarters in California.

In an interview after his presentation at the Skybridge Alternatives (SALT) investor conference in Las Vegas, Loeb threw an unexpected bone to the Yahoo board, saying there are good people there with whom he could work.

Loeb said the issue at Yahoo is fairly straightforward: There’s a lack of leadership, vision, and values. Speaking of recent revelations that Yahoo CEO Scott Thompson misrepresented his educational credentials, Loeb said the issue comes down to accountability — and there’s a crisis of leadership at the company.

Yahoo has not responded to repeated requests for comment.

On the panel, a rare public appearance for the Third Point activist, Loeb said that Yahoo’s business had suffered in recent years as management squandered numerous opportunities. The company has “missed every important trend on the Internet: social, local, you name it,” he told the audience.

Even so, asked what upside he sees in Yahoo, Loeb said after his presentation that the company is a value story with an enormous margin of safety because of all its assets. On the panel, he had pointed out that Yahoo’s Asian assets in particular — Alibaba and Yahoo Japan — were worth a great deal.

Loeb also took aim at Yahoo director Patti Hart, whose educational credentials have also been questioned by Third Point and others. Loeb said that Hart, who led the search for Thompson, should step down from the board immediately. Hart, chief of the game maker International Game Technology, announced Tuesday she would not seek re-election at Yahoo’s upcoming annual meeting. Loeb added that Hart has yet to acknowledge her own misrepresentations.

Yahoo needs major director and management changes, Loeb said on the panel. “From the board level,” he added, “what we really want to see is better process and kind of a rebuilding of the whole firm’s culture and the way they do business.”

Loeb knows that his proxy battle with Yahoo, which has involved a number of strongly-worded letters, the launching of an activist web site, and the nomination of four new directors to the Internet company’s board, could be a long one. He said in theory, it could take until Yahoo’s shareholder meeting, expected to take place this summer, for his issues to be resolved.

He’ll fight it out as long as it takes, he said.

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