Yahoo! Sets Annual Meeting for July 3

Angry shareholders will have a chance to confront the board at the meeting.
By Pia Sarkar ,

SAN FRANCISCO --

Yahoo!'s

(YHOO)

shareholders may get a chance to retaliate against the company's board of directors at its annual meeting on July 3.

Microsoft

(MSFT) - Get Report

withdrew its $33-a-share bid for Yahoo! on Saturday, sending shares for the Internet provider down 15% on Monday as investors grumbled over the botched merger. But on Tuesday, the stock was clawing back up, gaining as much as 6% in recent trading.

Some shareholders now see hope in a revived deal with

Microsoft

(MSFT) - Get Report

while others are holding out for a relationship with

Google

(GOOG) - Get Report

that would allow Yahoo! to outsource its online search ads as a way to bump up revenue.

Cramer: A Reason to Buy Yahoo!

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Yahoo!, which had been stalling on a date for its annual meeting on the threat of Microsoft replacing its board of directors with a new slate that would favor a merger, now runs the risk of its own shareholders organizing a mutiny.

Shareholders have until May 15 to nominate a board of directors. In its announcement of the date for the annual meeting, the company did not disclose a site. Any effort to unseat the directors would be a costly endeavor, however, especially now that Yahoo!'s stock has regained some ground.

Activist shareholder Eric Jackson, who had been urging Yahoo! to accept a deal with Microsoft, is calling for shareholders to unseat the existing 10 members on the board, all of whom are up for election.

"I think it's a remote possibility that every director can be voted off this board," Jackson says. "But there is such anger about what's happened over the weekend, I think it's possible. If that were to happen, it would be a complete and utter embarrassment for each and every director."

He adds that even if key directors like Yahoo! co-founder and Chief Executive Jerry Yang and Chairman Roy Bostock get the boot, it would be enough to send a message to the company that it must find a way to reinvigorate the business, whether by holding new talks with Microsoft or finding an alternative, including a deal with Google or

Time Warner's

(TWX)

AOL division.

Yang and other company executives have been making their rounds with media outlets since Monday, trying to show that it was not Yahoo! who refused a deal with Microsoft but the other way around. Yahoo! had been holding out for a raised bid of $37 a share while Microsoft would go as high as $33 a share, which is still an improvement over its original bid of $31 a share.

Yang has said that Yahoo! would be open to talks with other companies, including Microsoft, but also emphasized a focus on its own growth plans.

Shares of Yahoo! were up 5.1%, or $1.25, to $25.62 in afternoon trading.

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