A calm hand at uneasy Yahoo Yahoo chairman has a full plate
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SAN FRANCISCO — Only 15 minutes after becoming chairman of Yahoo Inc., Roy Bostock was startled by his first order of business: how to deal with Microsoft Corp.’s $44.6-billion buyout offer.
The 67-year-old Madison Avenue veteran, chosen for his marketing expertise, had barely replaced Terry Semel the evening of Jan. 31 when Microsoft made its unsolicited bid.
Bostock took the news with aplomb, according to a person familiar with the events. He graciously accepted welcome-to-the-job jokes from his fellow board members, then he got to work.
“It was a helluva first day,” said another person close to the board.
With Microsoft’s takeover attempt, the years of botched opportunities and strategic indecision at Yahoo suddenly landed on Bostock’s shoulders.
The Sunnyvale, Calif., Internet company is under pressure from shareholders to reverse slowing growth and boost a stock that until the Redmond, Wash.-based technology giant swooped in had drifted to a four-year low.
Now Yahoo’s board must make a choice that will undoubtedly shape the future of advertising.
The man leading deliberations has influenced advertising’s past: One of the highlights of his four decades in the field was introducing America to a mouthwash called Scope.
But Bostock, who through a Yahoo spokeswoman declined to be interviewed, is more than a marketer. People who know him well say his expertise in handling a wide variety of crisis situations -- the rape scandal at his alma mater Duke University, turbulent labor relations at Northwest Airlines and the sub-prime mortgage mess at Morgan Stanley -- make him the right choice to guide Yahoo through its decision.
“I don’t think there is anyone calmer, more intelligent and more level-headed than Roy,” said Linda Kaplan Thaler, chief executive of Kaplan Thaler Group, an ad agency.
He will need to tap that reservoir of patience and intellect, said Skip Battle, the former chairman of PeopleSoft Inc. The software maker grappled with Oracle Corp.’s hostile takeover for 18 months before succumbing in December 2004.
Battle recalled the stress of trying to forge a consensus about the best interests of shareholders in the glare of the public spotlight. As with PeopleSoft, Yahoo directors must consider complex strategic and legal issues, including whether the acquisition would clear regulatory hurdles.
“I’ve always felt that directors are like firemen: They are sort of underemployed most of the time, but when a real nasty fire hits, they are overemployed,” Battle said. “At Yahoo, they will be earning their keep.”
Bostock’s four-year tenure on Yahoo’s board is not without controversy. He has come under fire from shareholders for rubber-stamping rich compensation packages for Semel and other executives and for not doing more to help improve the company’s performance.
But friends and colleagues described Bostock as a calm, affable straight shooter who can build consensus in even the most challenging circumstances.
“He never allowed the pressure of the situation to cloud his judgment,” said Allen P. Adamson, managing director of brand consulting and design firm Landor Associates. “He always had a strong sense of where he wanted to go and how to get there.”
Bostock first proved his leadership skills at Edina High School in a suburb of Minneapolis. As quarterback, he led the Hornets to their first state championship title in 1957. The son of a Duke University graduate, he became a Blue Devil on an athletic scholarship, playing baseball and football while studying English literature. He married his high school sweetheart, who also attended Duke.
After graduating with honors, he didn’t fulfill his dream of becoming a New York Giants linebacker, but he did get an MBA at Harvard University.
There, the influence of marketing guru Theodore Levitt led him to a career in advertising that ultimately landed him at the helm of McManus Group, what was then one of the world’s 10 largest advertising and marketing services companies. He was known as one of the kings of Madison Avenue, and his clients included Procter & Gamble and General Motors.
In 2002, he was chairman of BCom3 Group when it was acquired by Publicis Groupe, one of the world’s largest advertising holding companies, for $3 billion. Bostock retired from the rough-and-tumble ad business to run his own investment firm, sit on corporate boards and engage in various philanthropic pursuits.
Bostock’s ad expertise brought him to the attention of Yahoo’s board of directors. In 2003 it chose him to replace former CEO Tim Koogle.
Last year he took the place of Gary Wilson, a fellow Duke graduate and Yahoo board member, as chairman of Northwest Airlines just as the airline was emerging from bankruptcy. He impressed labor unions by softening the rhetoric.
Now, in an extraordinary confluence of events, Northwest is considering a buyout from Delta Air Lines, putting Bostock in the position of presiding over two major potential acquisitions at once.
In an August interview with the Minneapolis Star-Tribune, Bostock said: “This airline can sustain itself and build itself as an independent airline for the foreseeable future.” However, he added: “If an opportunity opens up where we think we can increase shareholder value -- and stakeholder value -- through a consolidation or merger, we’d look at it.”
That’s the kind of pragmatic attitude Bostock displays as chairman of the Partnership for a Drug-Free America, said Timothy Brosnan, executive vice president of business for Major League Baseball, who is a director of the nonprofit organization.
“He has taken hold of the partnership and really driven it to probably its most significant level of input on the anti-drug scene,” Brosnan said. “Even in the philanthropic sector -- believe it or not -- there are turf conflicts to navigate, and he has done so splendidly.”
Two years ago, Bostock, a Duke trustee until 2002, helped university President Richard Brodhead get through a national scandal when members of its men’s lacrosse team were falsely accused of rape.
“In many leadership roles over his long career, he has demonstrated time and again that he doesn’t rattle easily, is a calming influence who brings people together around a complex challenge and then drives to a solution,” Brodhead said.
The Bostock family has donated more than $8 million for various projects at Duke, where he also is known for his sense of humor. When a library building was named after him, he had the idea to offer a $500 prize in a contest designed to help people remember the correct pronunciation of his last name (Boss-stock).
Bostock’s past may foretell Yahoo’s future, said Bradley Johnson, a longtime editor at Advertising Age in Los Angeles.
Bostock retired from advertising as the industry was going through a period of massive consolidation.
Now competitive pressures may force the marriage of two struggling rivals trying to catch up to Internet search giant Google Inc., their single biggest threat in the surging business of online advertising.
“In the end, he ended up as the seller rather than the buyer,” Johnson said of Bostock’s former ad agency. “That seems to be the same position he is in today at Yahoo.”
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