Yahoo chairman defends merger stance at meeting

By Eric Auchard

SAN JOSE, California (Reuters) - Yahoo Inc tried to soothe angry investors at its annual meeting on Friday, insisting it had been serious about talks to sell itself to Microsoft Corp and that it had good growth prospects in the next three years.

Yahoo's board "called the shots" when discussing Microsoft's proposals, including a $47.5 billion (24 billion pounds) buyout bid as well as attempts to buy Yahoo's Web search business, Chairman Roy Bostock said.

There was never any doubt that directors were open to a deal with Microsoft, Bostock said, adding he could not understand why the software maker withdrew its full takeover offer.

"There was never a compelling offer put on the table," Bostock said at the shareholder meeting at a hotel in San Jose, California. "That never occurred in this process."

A Microsoft spokesman disputed Bostock's version of events, saying "Yahoo is attempting to rewrite history yet again."

Yahoo shareholders criticized the board and management, highlighting the dissatisfaction that has dogged the company's shares since talks about a full Microsoft acquisition broke up in May.

"I think you have overpaid in terms of executive compensation, overplayed your hand with Microsoft and overstayed your welcome on the board," said Eric Jackson, a vocal critic of Yahoo's leadership.

Jackson is a fund manager with Ironfire Capital in Tampa, Florida, and holder of 250 Yahoo shares, who leads a loose-knit group of 150 other shareholders who collectively own 3.2 million shares.