Third Point demands resignation of Yahoo founder

Hedge fund manager Daniel Loeb launched another attack on Yahoo Inc on Friday, demanding co-founder Jerry Yang’s resignation and two seats on the struggling Internet company’s board. In a letter to Yahoo’s board, Loeb said he was “deeply concerned” Yahoo is looking at deals that will allow private equity firms to gain substantial equity positions in the company. “More troubling are reports that Mr. Yang is engaging in one-off discussions with private equity firms, presumably because it is in his best personal interests to do so,” he stated in the letter, adding that Yang should clarify whether he is a buyer or seller. Loeb’s comments came on the same day the company signed confidentiality agreements with several parties interested in buying all or part of the Internet company, according to people familiar with the matter.

A bit of a downward spiral

The Sunnyvale, California-based Internet pioneer wants potential buyers to sign an agreement by Friday to be allowed a close look at Yahoo’s finances. Yahoo has gone was one of the hottest Internet companies a decade ago but has been mired in challenges for the last several years, as it tries to hang on to its share of online advertising, which is being siphoned away by larger and more nimble rivals such as Google Inc and Facebook. Loeb, who owns roughly 5 percent of Yahoo through his Third Point Point LLC fund, previously blasted Yahoo’s board for letting the Internet pioneer stagnate at a time when Web companies such as Google and Facebook thrived.

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Reuters