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Levinsohn Plays Defense as Shareholders Grow Uneasy

Thursday, 12 Jul 2012 | 3:58 PM ET

Yahoo shareholders hoping to leave the annual meeting with news of a new permanent CEO were disappointed.

Ross Levinsohn
Bloomberg via Getty Images
Ross Levinsohn

At the annual shareholder meeting all 11 board members were re-elected, executive compensation was approved. (Eight of those 11 directors, including Chairman Fred Amoroso joined since January).

But there was no mention of a permanent CEO choice. As one shareholder noted after the meeting, after five CEOs in as many years the board is certainly taking its time to make sure it puts the right guy in the job.

In the meantime, the front-runner for the CEO job, interim CEO Ross Levinsohn, was in the spotlight. In the meeting he laid out his road map for the company and fielded questions and criticism about Yahoo's failure to execute, what the company aims to be, it's competition, failure to capture a younger generation of users, and failure of its video offerings to compete.

Other questions Levinsohn faced were: Why aren't Yahoo's ad offerings competing better with Google and Facebook . And one shareholder asked why Yahoo spends a greater percentage of its revenue on research and development than Apple does.

Yahoo Shareholder Meeting
Shareholders are underwhelmed, reports CNBC's Julia Boorstin.

Levinsohn laid out three areas of focus: content, technology, and unlocking value from its investment in Alibaba.

He cited new content deals with ABC and CNBC (CNBC and Yahoo have a business alliance to share and co-produce editorial content.) In addition to delivering better content, Levinsohn says the company should use technology to leverage all the data it has about its users (respecting their privacy of course), to deliver more targeted, and valuable ad.

The real power player behind today's meeting — and the lack of fireworks — was activist investor Dan Loeb. With 5.8 percent of Yahoo shares, Loeb is one of Yahoo's largest shareholders and waged a proxy battle, which the company extinguished in May by giving Loeb and two of his allies seats on the company's board.

Thursday's meeting comes under the cloud of two negative headlines. ComScore announced that Yahoo lost search marketshare for the 10th consecutive month, falling behind Microsoft to third place.

And Hackers claimed they posted some 400,000 user accounts and passwords online. Yahoo responded by acknowledging the security breach, but said it wasn't as bad as reported: less than five percent of those accounts had valid passwords. Still, any kind of hack attack and privacy violation isn't good for business.

Here's the full statement:

"At Yahoo! we take security very seriously and invest heavily in protective measures to ensure the security of our users and their data across all our products. We confirm that an older file from Yahoo! Contributor Network (previously Associated Content) containing approximately 400,000 Yahoo! and other company users names and passwords was stolen yesterday, July 11. Of these, less than 5% of the Yahoo! accounts had valid passwords. We are fixing the vulnerability that led to the disclosure of this data, changing the passwords of the affected Yahoo! users and notifying the companies whose users accounts may have been compromised. We apologize to affected users. We encourage users to change their passwords on a regular basis and also familiarize themselves with our online safety tips at security.yahoo.com."

Questions? Comments? MediaMoney@cnbc.com

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  • Working from Los Angeles, Boorstin is CNBC's media and entertainment reporter and editor of CNBC.com's Media Money section.