The activist shareholder spearheading an online campaign against Yahoo!'s management will seek a seat on its board in June. Eric Jackson says wealthy supporters will cover the $200,000 cost of the campaign.
"I have nominated myself for a spot on the board and the annual meeting is on June 12th," said Jackson, who is behind a shoestring campaign which uses blogs and YouTube videos to attempt to unseat chief executive Terry Semel. "Between now and then to get elected I need to run a proxy contest, and that costs a lot of money."
Jackson owns just 45 Yahoo! shares, currently around $1,200-worth, but is running an online campaign to motivate other disaffected shareholders to back his 'plan B' for Yahoo!, which involves firing Semel and finding a way to claw back market share from Google.
Jackson said that he has requested meetings with management, and that he will run for a seat on the board of the company in June, which he says will be a costly exercise.
"The estimates are usually in the area of $200,000," he told OUT-LAW Radio, the weekly technology law podcast. "It's pricey, but in our shareholder group we're fortunate that some of the members are well heeled and are interested in pursuing that."
Jackson's is the kind of plan usually put in place by more traditional activist shareholders, who target a company and buy stock, and therefore control. But Jackson is trying to do it without spending billions of dollars on shares.
"I don't have a $6 billion hedge fund so I thought how can I get the same impact as that?" he said. "I thought, well I have my blog, I sat down in January and recorded a YouTube video of myself making a call to action for Yahoo! shareholders."
Jackson uses the currently fashionable tools associated with the so-called web 2.0 phenomenon to exert an influence out of proportion to his shareholding, gathering supporters to his cause at almost no cost.
"It was a combination of my own blog, where people could leave comments and make suggestions, the use of YouTube videos, where I would give periodic updates and the third major web tool that was used was a wiki for the actual plan B itself," said Jackson.
His efforts have met with surprising success. He now has almost 200 million shares pledged to his cause by proxy, which is $55 million-worth of stock accounting for 0.2% of the company. Traditional activist shareholders often change the direction of a company with as little as 0.5% of a firm.
Jackson, a business advisor in his day job, said that his new plan for Yahoo! centres on replacing Semel as chief executive. "We're advocating nine steps. We think the company could benefit from a new leader," he said. "We think the company should look to replace seven of the 10 directors. There appears to be a certain amount of drift at Yahoo! and a lack of coherent explanation as to what's next for this company."