Tuesday, January 17, 2012

Instant view: Yahoo co-founder Yang is out, shares jump

(Reuters) - Yahoo Inc co-founder Jerry Yang, who started the company in 1995, has quit the board of the struggling Internet company.
His abrupt departure comes two weeks after Yahoo appointed Scott Thompson to serve as its new CEO. Yang is leaving the company's board of directors as well as all other positions within the company, effective Tuesday, the company said.
"It probably increases the likelihood of a transaction happening. It makes it more flexible for a potential transaction to happen. Some investors could view Jerry as a thorn on the board.
"What i do find surprising is he resigned from all three boards: Yahoo Japan, Alibaba as well as Yahoo.
"I had thought that Jerry Yang was a lifer at Yahoo ... What's more interesting is what he plans to do next. We don't know what that is. Some people are speculating whether a PIPE deal is off the table because Jerry is no longer part of the process, but I think that actually could increase the chance of a PIPE deal because some private equity investors might view Jerry as a potential thorn in a transaction.
"Without him on the board, this could smooth a potential transaction. What that transaction is, is any of our guesses right now.
"We're sticking to our thesis. I think it still takes awhile. A transaction is obviously more complicated than anybody thinks it is. We said that six months ago, and we're saying that again right now."
"Everyone is going to assume this means a deal is more likely with the Asia counterparts. The perception among shareholders was Jerry was more focused on trying to rebuild Yahoo, than on necessarily on maximizing near-term shareholder value. The perception was that he had an emotional attachment that obviously a non-founder might not have.
"The stock is up after hours. People are going to assume the deal is more likely.
"It certainly seems things are coming to a head as far as realizing the value of these assets.
"Shareholders that own (shares) just for the deal are going to react positively. I'm not sure this is in any way a positive for the underlying fundamental asset of Yahoo.com. That's not what drives the stock. Yahoo.com is in a lot of ways almost inconsequential to the value of the overall stock."
"We have been relatively pessimistic on the likelihood of any sort of major divestiture creating a great deal of upside for investors. Jerry Yang was certainly an impediment toward anything happening.
"This is a company that's been mired by a bunch of competing interests going in different directions. It was never clear what this board's direction has been. We can certainly look back to several years ago, when they were not able to get a successful exit or sale to Microsoft. We obviously know that was not a particularly prudent move.
"Still, however, here we are. If you are to believe that the board was somewhat misdirected, we have largely much of the same board in place.
"We would caution folks to be not overly enthusiastic. It's certainly not a negative for the stock, not a negative for the business. Clearly, how many times can this company stumble and not try and rectify any sort of situation here.
"Taking action at the board level, I think that's a good thing. I think it's good to have a fresh perspective."
"This is clearly a positive. Yang has been viewed as a roadblock to a deal or even a restructuring. Hopefully it leads to new blood on the board. It provides a more objective and unemotional approach to strategic alternatives.
"It's also good for the new CEO. He has one less entrenched legacy board member to resist his vision."
(Reporting by Liana Baker in New York, Poornima Gupta in San Francisco and Lisa Richwine in Los Angeles; editing by Andre Grenon)

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Wikipedia to be blacked out over anti-piracy bill

Wikipedia will black out the English language version of its website Wednesday to protest anti-piracy legislation under consideration in Congress, the foundation behind the popular community-based online encyclopedia said in a statement Monday night.
The website will go dark for 24 hours in an unprecedented move that brings added muscle to a growing base of critics of the legislation. Wikipedia is considered one of the Internet's most popular websites, with millions of visitors daily.
"If passed, this legislation will harm the free and open Internet and bring about new tools for censorship of international websites inside the United States," the Wikimedia foundation said.
The Stop Online Piracy Act in the U.S. House of Representatives and the Protect Intellectual Property Act under consideration in the Senate are designed to crack down on sales of pirated U.S. products overseas.
Supporters include the film and music industry, which often sees its products sold illegally. They say the legislation is needed to protect intellectual property and jobs.
Critics say the legislation could hurt the technology industry and infringe on free-speech rights. Among their concerns are provisions that would weaken cyber-security for companies and hinder domain access rights.
The most controversial provision is in the House bill, which would have enabled federal authorities to "blacklist" sites that are alleged to distribute pirated content. That would essentially cut off portions of the Internet to all U.S. users. But congressional leaders appear to be backing off this provision.
Tech companies such as Google, Facebook, Yahoo, Twitter, eBay, AOL and others have spoken out against the legislation and said it threatens the industry's livelihood. Several online communities such as Reddit, Boing Boing and others have announced plans to go dark in protest as well.
The Obama administration also raised concerns about the legislation over the weekend and said it will work with Congress on legislation to help battle piracy and counterfeiting while defending free expression, privacy, security and innovation in the Internet.
Wikipedia's decision to go dark brings the issue into a much brighter spotlight. A group of Wikipedia users have discussed for more than a month whether it should react to the legislation.
Over the past few days, a group of more than 1,800 volunteers who work on the site and other users considered several forms of online protest, including banner ads and a global blackout of the site, the foundation said. Ultimately, the group supported the decision to black out the English version of the site.
Jimmy Wales, the founder of Wikipedia who first announced the move on his Twitter account Monday, said the bills are a threat to the free, open, and secure web.
"The whole thing is just a poorly designed mess," Wales said in an email to The Associated Press.
Wikipedia is also requesting that readers contact members of Congress about the bill during the blackout.
"I am personally asking everyone who cares about freedom and openness on the Internet to contact their Senators and Representative," Wales said. "One of the things we have learned recently during the Arab spring events is that the Internet is a powerfully effective tool for the public to organize and have their voices heard."
Wikipedia will shut down access from midnight Eastern Standard Time on Tuesday night until midnight Wednesday.
This is the first time Wikipedia's English version has gone dark. Its Italian site came down once briefly in protest to an Internet censorship bill put forward by the Berlusconi government; the bill did not advance.
"Wikipedia is about being open," said Jay Walsh, spokesman for the Wikimedia foundation. "We are not about shutting down and protesting. It's not a muscle that is normally flexed."
Skidmore reported from Portland, Ore.