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http://online.wsj.com/article/BT-CO-20110908-712767.html

Third Point Takes 5.15% Stake In Yahoo, Demands Changes On Board


DOW JONES NEWSWIRES

Third Point LLC, run by hedge fund manager Dan Loeb, reported a 5.15% stake in Yahoo Inc. (YHOO), positioning itself as the embattled web company's third-largest outside shareholder as it lobs stiff criticism at Yahoo's board.

The move, which puts Third Point's stake of stock and options at 65 million shares, comes just days after Yahoo's board ousted former Chief Executive Carol Bartz. The board was displeased with her failure to boost revenue and revive the company's share price, people familiar with the matter told The Wall Street Journal.

In a letter to the board dated Thursday, Loeb commended Bartz's firing but aimed sharp criticism at Yahoo's board, saying he believes the board has made a series of decisions that have harmed the company.

Among the criticisms, Loeb faulted the board for turning down a $31-a-share takeover bid made by Microsoft Corp. (MSFT) in 2008.

"From the failed Microsoft sale negotiations, to a subsequent bungled and disappointing search deal with Microsoft, through a series of misguided CEO selections, and most recently the Alipay debacle, this board's failures have destroyed value for all Yahoo stakeholders," Loeb wrote.

Alipay is a key online payments unit of Alibaba Group Holding Ltd., in which Yahoo holds a roughly 40% stake. Yahoo and Alibaba recently clashed over Alibaba CEO Jack Ma's decision to transfer ownership of Alipay to a separate company under his own control without obtaining approval from its board, on which Yahoo has a seat.

A representative for Yahoo couldn't immediately be reached for comment.

-By Mia Lamar, Dow Jones Newswires; 212-416-3207; mia.lamar@dowjones.com


Eric D. Schwerin
Rosemont Seneca Partners, LLC
1010 Wisconsin Ave., NW
Suite 705
Washington, DC 20007
(202) 333-1880
eschwerin@rosemontseneca.com
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