Loeb's hedge fund launches site in war with Yahoo

Hedge fund manager Daniel Loeb has intensified his firm Third Point's proxy battle with Yahoo Inc, launching a website calling for a management shakeup at the online media company. ValueYahoo.com, which went live on Monday, also boasts a blog, links to articles covering the proxy fight and biographies of four proposed board nominees, including Loeb himself. Loeb is using the website to line up support for Third Points' positions ahead of Yahoo's annual meeting expected to take place in June. The site, along with an associated Facebook page, is a new tactic taken by the hedge fund manager famous for sending vituperative letters to corporate managers over the years. With a 5.8 percent stake in Yahoo, Third Point is the media company's largest institutional shareholder. For several months, the New York-based hedge fund has been demanding that Yahoo revamp its board, which Loeb says is largely responsible for its lagging share price, loss of market share to rivals like Google Inc and Facebook Inc, and a failed sale to Microsoft Corp in 2008, among other alleged blunders. "After years of failed leadership and poor governance, Yahoo! shareholders have a chance to inject experienced, independent voices aligned with their interests," Third Point wrote in a blog post on the new portal. Third Point's proposed "Shareholder Slate," which includes Loeb, Harry Wilson, Michael Wolf and Jeff Zucker, "seeks a voice and a choice for Yahoo! owners hurt by the current 'Legacy Board's' track record of value disintegration, and wants to prevent the Board from simply nominating their handpicked replacements." A representative for Third Point declined to comment. A Yahoo representative was not immediately available for comment. Wall Street analysts have noted that Yahoo's failure to make inroads in social networking has cost it market share. In an effort to placate angry shareholders and avoid a proxy fight, Yahoo announced in late March the appointment of three new directors, and proposed to include one of Third Point's four nominees on the board, as well as a second person acceptable to both Yahoo and Third Point. Loeb rejected the offer, and sent a letter to Yahoo CEO Scott Thompson last Wednesday lambasting the company for excluding shareholders from the board. The letter, and others that Loeb has penned since September, can be viewed on the new shareholder site. Third Point is not the first money manager to launch a website as part of a wider proxy battle to bring about management changes. Investment firm Mount Kellett Capital Management, for example, launched ShareholdersForBaja.com in February as a tool in its battle with Baja Mining Corp. "It's fairly common for a dissident to have a website in an activist campaign these days," said Damien Park, a managing partner of Hedge Fund Solutions, which tracks activist hedge funds. "Third Point's is a little nicer than most I've seen," he added.