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I'm a Yahoo! shareholder and user and am using this blog/vlog post to reach out to all current and future Yahoo! stockholders. Yahoo! is drifting, and its board and management have been too slow to act to this fundamental problem.

As shareholders, we don't have to sit by and watch this; the company is not private and is not by management, for management. When Jerry Yang and David Filo decided to take this company public in 1996, they were agreeing to the participation of shareholders in the direction of the business.

We live in an era of Shareholder Democracy. However, most mutual funds, institutional investors, and especially retail investors have typically not been activists where they used the voting power of their shares; through this apathy, they have ceded their power to management.

In recent years, some investors have been able to successfully advocate for change (like Pershing Square with Wendy's and McDonald's, Private Capital with Knight Ridder, and Relational Investors with National Semiconductor, JC Penney, and -- most recently -- Home Depot).

Activist Investing has principally been the domain of hedge funds -- well, no longer.

With the help of the web, blogs, and wikis, I'm asking all current and future retail investors in Yahoo! to join me in pushing for a change.

I like the founders, I like some of the directors, and I like some of the Yahoo! management a lot; yet, for whatever reason, they are not moving fast enough … we can help.

Let's take back control of one of the greatest Internet companies in the world and see the stock price finally start moving up.

It's been a terrible last two years for Yahoo, in terms of its stock price. YHOO is down 32% for the last 2 years (even after the whole Internet market blipped up in the last couple of days); the S&P500 is up 17% over this time; the NASDAQ is up 11%; Google (NASDAQ:GOOG) is up almost 150%.

The "Peanut Butter Manifesto" leaking to Page One in the WSJ in November is a sign of internal disarray. Change is needed.

Yahoo! management responded with a reorganization plan on December 5th; however, in our opinion, this re-org is not enough.

I'm asking all of you who are YHOO shareholders to join me in proposing a "Plan B for Yahoo!" which we will take to management and the board.

Here's my strawman Plan B. If you have edits/suggestions, let me know in the comments section below. Once we wiki-ize it, we will take it forward and present it to Yahoo's management and board:

1. Appoint Susan Decker CEO immediately; implement pay-for-performance for all YHOO execs going forward.

2. Restructure the board immediately with more active outside directors who own stock; 10 year term limits for directors should also be introduced.

3. Set up a special committee of the board to study and then articulate the company's vision/strategy and start executing it.

4. Step up the pace of the $3B stock repurchase plan announced in October 2006.

5. Begin a cash dividend immediately.

6. Reduce overlapping internal divisions (e.g., del.icio.us/MyWeb, Flickr/MyPhotos.)

7. Remove anti-takeover provisions which are not shareholder-friendly.

Here's what I'm asking from each current and future YHOO shareholder:

1. If you're not a YHOO shareholder, I'm asking you to join me and buy 10, 20, 50, or 100 shares; at $27.74, they are still a bargain relative to the company's collection of assets and potential; we believe that our engagement with Yahoo! will spur an increase in the stock price.

2. Let me know if you are willing to join us in proposing our "Plan B" to Yahoo's Board and, if so, what your ownership stake is; we would like to put together a group speaking on behalf of 10% of the company. Yahoo! has 250MM registered users. If 10% of those purchased 50 shares and joined our group, we would easily hit our goal. There's nothing magical about 10%. However, it's large enough to give us a strong voice among shareholders.

3. Comment/Make suggestions on our "Plan B".

Once we finalize our Plan B, we will take it to Yahoo's management and board and suggest that they adopt the plan immediately; if they don't, we will use our ownership stake in the company to effect change to Yahoo!'s board composition.

Together, we can make a difference.

Let's take back control of one of the greatest Internet companies in the world and see the stock price finally start moving up.

Thanks.

Disclosure: Author is long Yahoo.

Source: A Petition For Active Investing: Yahoo Shareholders Must Advocate For Change