Time Warner says ex-exec can't join Yahoo's boardAugust 1, 2008: 7:40 PM ET
By Yi-Wyn Yen
SAN JOSE, Calif. - Yahoo's shareholder meeting on Friday was pretty dull, but that didn't stop things from getting ugly for the troubled Internet portal as both Time Warner and Microsoft signaled their dissatisfaction with the company.
Time Warner (TWX) (Fortune's parent company) said that ex-AOL chief executive Jonathan Miller cannot join Yahoo's board because of a non-compete agreement, although Yahoo (YHOO) announced the nomination last week. Meanwhile, Microsoft (MSFT) denounced Yahoo chairman Roy Bostock's interpretation of its negotiations with the company.
Miller was largely expected to be named as one of the two appointees in a compromise with activist investor Carl Icahn. On July 21, Icahn agreed to abandon his proxy fight to oust Yahoo's directors in exchange for three seats on an expanded board. The new 11-member board so far includes Yahoo's eight incumbents and Icahn. The two members will be named within two weeks.
A Time Warner spokesman said that Miller, who stepped down from AOL in November 2006, signed a non-compete clause that prevents him from joining a competitor like Yahoo until March 2009. "His non-compete clause was never waived," said Time Warner spokesman Keith Cocozza.
A source familiar with Yahoo's operations disagreed. This person said Miller and Yahoo management had approached Time Warner for approval before Yahoo announced Miller's nomination two weeks ago. The source would not say whether Yahoo received the approval but then said the company would not have proceeded otherwise.
A Yahoo spokesperson declined to comment on whether Miller will remain a board nominee.
Shareholders gave their overwhelming support to Yahoo's incumbents. CEO Jerry Yang received 85.4% of approval, Bostock garnered 79.5% and Vyomesh Joshi of Hewlett-Packard received the highest support with 92.9%.
Time Warner and Yahoo weren't the only ones in a standoff. Microsoft took issue with how Bostock characterized negotiations with the software giant.
During the Yahoo shareholder meeting, Bostock claimed that Microsoft was a bad communicator. During the six-month ordeal, Bostock said Yahoo's board "encouraged them to engage in more discussions, but they in fact reduced engagement and suggested they'd lower the price and launch a proxy fight." Bostock also said that Microsoft did not "explicitly communicate to our board" that it wanted to raise the offer from its original $31-per-share bid to $33-per-share.
Two hours after the Yahoo meeting ended, Microsoft issued a press release that said, "Yahoo is attempting to rewrite history yet again with statements that are not supported by the facts."