Yahoo chairman defends merger stance at meeting

By Eric Auchard

SAN JOSE, California (Reuters) - Yahoo Inc tried to soothe angry investors at its annual meeting on Friday, insisting it had been serious about talks to sell itself to Microsoft Corp and that it had good growth prospects in the next three years.

Yahoo's board "called the shots" when discussing Microsoft's proposals, including a $47.5 billion buyout bid as well as attempts to buy Yahoo's Web search business, Chairman Roy Bostock said.

There was never any doubt that directors were open to a deal with Microsoft, Bostock said, adding he could not understand why the software maker withdrew its full takeover offer.

"There was never a compelling offer put on the table," Bostock said at the shareholder meeting at a hotel in San Jose, California. "That never occurred in this process."

A Microsoft spokesman disputed Bostock's version of events, saying "Yahoo is attempting to rewrite history yet again."

Yahoo shareholders criticized the board and management, highlighting the dissatisfaction that has dogged the company's shares since talks about a full Microsoft acquisition broke up in May.

"I think you have overpaid in terms of executive compensation, overplayed your hand with Microsoft and overstayed your welcome on the board," said Eric Jackson, a vocal critic of Yahoo's leadership.

Jackson is a fund manager with Ironfire Capital in Tampa, Florida, and holder of 250 Yahoo shares, who leads a loose-knit group of 150 other shareholders who collectively own 3.2 million shares.

Another investor said he wanted to know how much time Yahoo directors spent doing their jobs to earn their pay.

"I'd like to see timesheets posted on the Internet for the work of the directors as well as the executives of the company," said Dirk Neyhart, a retired stockbroker from Berkeley, California, who said he holds less than 1,000 shares of Yahoo. He holds shares in more than 600 companies, he said.

26-HOUR DAYS

Bostock said he would be happy to comply, given the considerable time spent negotiating with Microsoft over the last six months.

"It's been about 26 hours in the course of a 24-hour day," Bostock said.

Nine Yahoo candidates were standing for election to the board on Friday, including Bostock and Chief Executive Jerry Yang, who have borne the brunt of investor anger over the collapsed deal.

Yang painted an optimistic view of Yahoo's ability to capture the shift of advertising dollars to the Internet, even as the company lags behind rival Google Inc.