Eric Jackson, a Yahoo shareholder, dreamed of influencing companies in the same way as billionaire financier Carl Icahn.
Icahn, one of the nation's top shareholder activists, forces change on underperforming companies by first buying up big blocks of shares. Jackson, CEO of a Naples, Fla.,-based consulting company lacks Icahn's resources. But last January, Jackson believed he had found another way to shake things up at Yahoo.
Dismayed with the portal's sagging share price and the company's failure to keep up with Google, Jackson launched an Internet campaign to convince independent investors like himself to band together and call for change at Yahoo. He blasted the company's leaders on blogs, invited other frustrated shareholders to vent on a Wiki, and posted angry videos to YouTube.
Jackson, the guy who asked CEO Terry Semel at last week's stockholder meeting whether he had a "fire in the belly" for his job, acknowledges that at best his group played only a small part in Semel's departure on Monday as CEO. Still, he notes that Yahoo's board of directors was re-elected last week with only 66 percent approval. Typically boards receive between 80 percent to 90 percent approval.
"With the Internet, we could have the same net effect as an activist hedge fund," Jackson said. "There was no one thing that led to (Semel stepping down), but certainly we were in the mix."
There are plenty of examples of how the Internet is a boon to grassroots movements. For his inspiration, Jackson noted the political campaign of Ned Lamont, the Senate candidate who defeated former Sen. Joe Lieberman in Connecticut.
In the same way, the Web could prove to be a powerful tool in the hands of shareholders at a time when activism is catching fire, said Robert McCormick, chief policy officer at Glass, Lewis & Co., an independent proxy adviser that last week issued a recommendation that Yahoo shareholders withhold votes for the company's board.
McCormick pointed to Home Depot as another example of shareholders organizing themselves via the Internet. In January, an investor rebellion led to the ouster of that company's CEO, Bob Nardelli.
But in the case of Jackson's campaign, there's some question as to how many Yahoo shareholders actually fell in behind him. He said that he spoke for more than 100 investors who owned a combined 2.1 million shares valued at about $60 million. How did he know those who pledged their shares actually owned them?
"I can't say for certain that they owned them," said Jackson, 34. "It was made on a good-faith basis. Ultimately, Yahoo respected us enough to know we weren't trying to snow anybody."
As for the future, Jackson said he expects the Web to play a large role in proxy votes.
"It makes sense to shareholders to communicate and pull together," Jackson said. "This way you don't need a $6 billion hedge fund."