SAN JOSE, California 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.
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.
The Yahoo co-founder said his company expects 335 million additional Internet users to come online worldwide by 2010, for a total potential audience of 1.56 billion.
A majority of these Web users will be in Asia or emerging markets, Yang said, where Yahoo has a strong Web presence.
Yahoo agreed in July to expand its board to 11 members after the annual meeting to accommodate activist investor Carl Icahn and two of his candidates. But one of Icahn's potential candidates appeared to drop out of the picture on Friday.
Former AOL CEO Jonathan Miller was named as a potential Yahoo director, but AOL's corporate parent Time Warner Inc said on Friday it had not waived a non-compete clause that would bar him from joining Yahoo before March 2009.
Yahoo director Robert Kotick, the chief executive of Activision Blizzard Inc, will resign after Friday's meeting to open one board seat.
Icahn had demanded that Yahoo offer to sell itself to Microsoft, but agreed to settle for the board seats after the software maker made it clear it no longer would pursue a deal.
In a blog post on Thursday, Icahn downplayed the annual meeting's importance and said he would skip it.
Yahoo shares fell 9 cents on Friday to $19.80, not far above the $19.18 that they fetched the day before Microsoft made its interest public. Microsoft's last offer for the company would have valued Yahoo at $33 per share.
(Additional reporting by Michele Gershberg and Kenneth Li in New York and Anupreeta Das in San Francisco; Editing by Braden Reddall)