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Will New Directors Help or Hurt Yahoo?

Posted by: Rob Hof on August 14, 2008

As expected, Yahoo has just appointed former Viacom CEO Frank Biondi Jr. and former Nextel Partners CEO John Chapple to its board. They’re two of the slate proposed by activist investor Carl Icahn before he gave up his proxy fight in return for three board seats, including one for himself.

The pair’s experience in media and technology would actually seem to offer some benefits to Yahoo—though given their connection with Icahn, their counsel may end up at odds with what CEO and cofounder Jerry Yang and his allies on Yahoo’s board want.

On the other hand, does Yahoo really need two more strong voices on its board? Trip Chowdhry, an analyst with Global Equities Research, raises a valid concern that Yahoo could suffer from “too many cooks in the kitchen” as a result of their addition to the now 11-person board. Chowdhry thinks the restructuring and plotting the new board will engage in will only give rivals Google and Microsoft more time to grow stronger.

Given that the Icahn trio will continue to be a distinct minority, it seems unlikely they’ll be able to change Yahoo’s direction much. What Yahoo really needs to do, after years of losing ground to Google (and losing a lot of talent), is execute on a strategy that on its face makes sense to many people. And that’s not something most boards have much power to influence directly.

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BusinessWeek writers Peter Burrows, Cliff Edwards, Olga Kharif, Aaron Ricadela, Douglas MacMillan, and Spencer Ante dig behind the headlines to analyze what’s really happening throughout the world of technology. One of the first mainstream media tech blogs, Tech Beat covers everything from tech bellwethers like Apple, Google, and Intel and emerging new leaders such as Facebook to new technologies, trends, and controversies.



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