Yahoo CEO Carol Bartz was backed by the company's chairman at the start of the company's annual shareholder meeting on Thursday, but got ripped by an investor who called for her resignation.
Yahoo's board is rumored to be talking to possible CEO replacements, but Roy Bostock said no such thing is in the works and that Bartz has the confidence of the directors because under her guidance, Yahoo has made "demonstrable progress."
"We still have a lot of work to do to deliver the kind of value we want to deliver to our shareholders. This is indeed a work in progress but this management team has built a strong foundation," Bostock said.
However, an investor, who said he also advises institutional investors with large stakes in the company, blasted Bartz for a variety of things, including the company's stock price, its latest conflict with Alibaba Group and its overall market strategy.
At this point, Bartz should resign, he said. "The last thing Yahoo needs right now is a lame-duck CEO. The buyout talks over your contract need to start today and a search needs to be accelerated."
The shareholder spoke for several minutes and didn't mince words in his criticism of Bartz, saying that the upbeat tone of her prepared remarks at the meeting painted an unrealistic picture of what he considers to be a deeply troubled company.
"No more excuses, no more victory laps," he said.
When he was finished speaking, she thanked him and said: "That was certainly a downer." The meeting ended on that note.
All Yahoo directors, including Bartz, won re-election to the board at the meeting. Bartz's CEO contract ends in January 2013.
In May, Yahoo got into its latest tussle with Alibaba Group, the Chinese company in charge of Yahoo's brand and services in that country. Yahoo owns a 43 percent stake in Alibaba Group worth about US$2.3 billion.
Yahoo accused Alibaba Group of spinning off its Alipay online payment unit to a Chinese company controlled by Alibaba CEO Jack Ma without Yahoo's knowledge.
Alibaba countered, saying that it had kept Yahoo's board members informed about the situation, which was driven by new regulations requiring that for Alipay to obtain a license, it needed to be spun off.
Eventually, the companies issued a joint statement saying they were working to draft a solution to the issue. This week they issued another statement reiterating that discussions are continuing. Yahoo is seeking compensation for the diminished value of its stake in Alibaba Group now that Alipay is no longer part of it.
Another difficult situation for Bartz is the search partnership she brokered with Microsoft, which isn't yielding the expected revenue for Yahoo so far.
She has said that the situation should be remedied by year's end and that in the meantime Yahoo is guaranteed a fixed revenue level through March of next year.
Yahoo has outsourced back-end search functions to Microsoft, like Web crawling, indexing and ranking, to save money and better compete against Google, and in exchange agreed to pay Microsoft a commission for paid search ads sold on Yahoo and Yahoo partner sites.
When the deal was signed, Yahoo estimated that, when fully implemented, it would boost its annual operating income by about $500 million, provide capital expenditure savings of about $200 million and increase annual operating cash flow by about $275 million.
On Thursday Bartz, who took over as CEO in January 2009 from co-founder Jerry Yang, rattled off a list of what she considers her main accomplishments, as she has done recently at other meetings and conference calls.
Specifically, she highlighted the revamping of the company's technology back end, designed to bring global consistency and increase the efficacy of the systems that power Yahoo's content management and advertising platforms.
With these new systems in place, Yahoo is able to serve up more personalized content faster across its sites, and deliver more targeted and effective advertising.
She also highlighted Yahoo's focus on delivering its content and ads across all devices and platforms, not only on desktop browsers, and stressed Yahoo's leading position in the U.S. and abroad in content categories like news and finance.
Still, the company's stock price hasn't rebounded dramatically. Company shares, which closed at $12.10 per share on Jan. 13, 2009, her first day as CEO, stood at $15.23 at yesterday's closing and were trading below $15 during Thursday's meeting.
In her first quarter on board, 2009's first quarter, Yahoo had revenue of $1.58 billion, down 13 percent year on year, while GAAP net income fell 78 percent to $118 million.
By comparison, in the first quarter of 2011, Yahoo had revenue of $1.21 billion, down 24 percent year on year, while net income fell 28 percent to $223 million.