October 25, 2020

DealBook: Yahoo Shakes Up Its Board

Marissa Mayer, chief of Yahoo.Stephen Lam/ReutersMarissa Mayer, chief of Yahoo.Daniel S. Loeb, the hedge fund manager of Third Point.Steve Marcus/ReutersDaniel S. Loeb, manager of the hedge fund Third Point.

Yahoo announced a number of changes to its board on Thursday, including the addition of Max Levchin, a co-founder of PayPal.

The company also said two directors were stepping down: Brad Smith, the chief executive of Intuit, and David W. Kenny, chief executive of the Weather Channel.

Yahoo’s latest board changes signal its continued push to become a top technology company once more, a strategy it began in July, when it hired Marissa Mayer away from Google to become its new chief executive.

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Since taking over, Ms. Mayer has emphasized ways to modernize Yahoo staples like its e-mail and the Flickr photo service, to help the company square off against ever-newer competitors.

Bringing in Mr. Levchin is intended to help with that push and show a commitment to developing enticing new offerings. He served as PayPal’s chief technology officer before forming Slide, a company that eventually helped produce Web applications for Facebook. Google bought Slide for about $180 million two years ago, and Mr. Levchin left the Internet giant when it closed Slide last year.

“Max is someone I’ve admired throughout my career for his phenomenal sense for great products and keen focus on user experiences,” Ms. Mayer said in a statement. “I’m confident that his strong product and technology expertise will be a tremendous asset to Yahoo as we work to transform the world’s daily habits.”

He will serve as the fourth director nominated by Daniel S. Loeb, the activist hedge fund manager who joined Yahoo’s board in May after mounting a prominent challenge to the company’s directors. Mr. Loeb’s other directors, besides himself, are Michael J. Wolf, a media consultant, and Harry J. Wilson, a turnaround expert who served on the Obama administration’s automotive task force.

Since joining Yahoo’s board, Mr. Loeb has helped orchestrate a number of changes, including hiring Ms. Mayer.

Mr. Loeb was introduced to Mr. Levchin by Mr. Wolf, who had served on Slide’s board of advisers. They met in Silicon Valley ahead of the proxy fight, when Mr. Loeb was recruiting candidates for Yahoo board seats.

One of the departing directors, Mr. Smith, was a main supervisor of Yahoo’s turnaround efforts, including its talks with private equity firms about a capital infusion into the Web company and its eventual deal to sell some of its stake in Alibaba back to its Chinese Internet partner.

The other, Mr. Kenny, became the Weather Channel’s chief executive in January and was formerly the president of Akamai Technologies. Mr. Kenny had briefly considered campaigning for Yahoo’s top spot last year.

Both men were stepping down to focus on their respective companies, according to Yahoo.

“Both David and Brad played critical roles in bringing me to Yahoo, so I’m especially grateful for the opportunity and trust they’ve placed in me,” Ms. Mayer said. “We will miss their leadership and partnership, and I know I speak for everyone at Yahoo in wishing them the best.”

Article source: http://dealbook.nytimes.com/2012/12/13/yahoo-said-to-plan-board-shake-up-adding-levchin/?partner=rss&emc=rss

DealBook: On Wall Street, Time to Mend Fences With Obama

Daniel Loeb, left, of Third Point, and Steven A. Cohen of SAC Capital Advisors.Phil McCarten/Reuters and Steve Marcus/ReutersDaniel Loeb, left, of Third Point, and Steven A. Cohen of SAC Capital Advisors.

Del Frisco’s, an expensive steakhouse with floor-to-ceiling windows overlooking the Boston harbor, was a festive scene on Tuesday evening. The hedge fund billionaires Steven A. Cohen, Paul Singer and Daniel Loeb were among the titans of finance there dining among the gray velvet banquettes before heading several blocks away to what they hoped would be a victory party for their presidential candidate, Mitt Romney.

The next morning was a cold, sobering one for these executives.

Few industries have made such a one-sided bet as Wall Street did in opposing President Obama and supporting his Republican rival. The top five sources of contributions to Mr. Romney, a former top private equity executive, were big banks like Goldman Sachs and JPMorgan Chase, according to the Center for Responsive Politics. Wealthy financiers — led by hedge fund investors — were the biggest group of givers to the main “super PAC” backing Mr. Romney, providing almost $33 million, and gave generously to outside groups in races around the country.

On Wednesday, Mr. Loeb, who had supported Mr. Obama in 2008, was sanguine. “You win some, you lose some,” he said in an interview. “We can all disagree. I have friends and we have spirited discussions. Sure, I am not getting invited to the White House anytime soon, but as citizens of the country we are all friendly.”

Wall Street, however, now has to come to terms with an administration it has vilified. What Washington does next will be critically important for the industry, as regulatory agencies work to put their final stamp on financial regulations and as tax increases and spending cuts are set to take effect in the new year unless a deal to avert them is reached. To not have a friend in the White House at this time is one thing, but to have an enemy is quite another.

“Wall Street is now going to have to figure out how to make this relationship work,” said Glenn Schorr, an analyst who follows the big banks for the investment bank Nomura. “It’s not impossible, but it’s not the starting point they had hoped for.”

Traditionally, the financial industry has tended to support Republican candidates, but, being pragmatic about power, has also donated to Democrats. That script got a rewrite in 2008, when many on Wall Street supported Mr. Obama as an intelligent leader for a country reeling from the financial crisis. Goldman employees were the leading source of campaign donations for Mr. Obama, who reaped far more contributions — roughly $16 million — from Wall Street than did his opponent, John McCain.

The love affair between Wall Street and Mr. Obama soured soon after he took office and championed an overhaul in financial regulations that became the Dodd-Frank Act.

Some financial executives complained that in meetings with the president, they found him disinterested and disengaged, while others on Wall Street never forgave Mr. Obama for calling them “fat cats.”

The disillusionment with the president spawned reams of critical commentary from Wall Street executives.

“So long as our leaders tell us that we must trust them to regulate and redistribute our way back to prosperity, we will not break out of this economic quagmire,” Mr. Loeb wrote in one letter to his investors.

The rhetoric at times became extreme, like the time Steven A. Schwarzman, co-founder of the private equity firm Blackstone Group, compared a tax proposal to “when Hitler invaded Poland in 1939.” (Mr. Schwarzman later apologized for the remark.)

Mr. Loeb was not alone in switching allegiances in the recent presidential race. Hedge fund executives like Leon Cooperman who had supported Mr. Obama in 2008 were big backers of Mr. Romney in 2012. And Wall Street chieftains like Jamie Dimon of JPMorgan Chase and Lloyd C. Blankfein of Goldman Sachs, who have publicly been Democrats in the past, kept a low profile during this election. But their firms’ employees gave money to Mr. Romney in waves.

Starting over with the Obama White House will not be easy. One senior Wall Street lawyer who spoke on condition of anonymity said Wall Street “made a bad mistake” in pushing so hard for Mr. Romney. “They are going to pay a price,” he said. “It will soften over time, but there will be a price.”

Mr. Obama is not without supporters on Wall Street. Prominent executives like Hamilton James of Blackstone, and Robert Wolf, a former top banker at UBS, were in Chicago on Tuesday night, celebrating with the president.

“What we learned is the people on Wall Street have one vote just like everyone else,” Mr. Wolf said. Still, while the support Wall Street gave Mr. Romney is undeniable, Mr. Wolf said, “Mr. Obama wants a healthy private sector, and that includes Wall Street.

“If you look at fiscal reform, infrastructure, immigration and education, they are all bipartisan issues and are more aligned than some people make it seem.”

Reshma Saujani, a former hedge fund lawyer who was among Mr. Obama’s top bundlers this year and is planning to run for city office next year, agreed.

“Most people in the financial services sector are social liberals who support gay marriage and believe in a woman’s right to choose, so I think many of them will swing back to Democrats in the future,” he said.

Article source: http://dealbook.nytimes.com/2012/11/07/on-wall-street-time-to-mend-fences-with-obama/?partner=rss&emc=rss

Economix: Poker as a Game of Skill

Steve Marcus/Reuters

Is poker a game of luck or skill? That’s the question the economists Steven D. Levitt (of “Freakonomics” fame) and Thomas J. Miles explore in a new working paper published with the National Bureau of Economic Research.

Their research may interest more than the usual band of professional economists. Last month, the Justice Department indicted executives of the three leading online poker sites that allow Americans to play, charging them with a variety of crimes including bank fraud and running an illegal gambling operation. The department is seeking $3 billion in compensation. As a result, the sites stopped accepting American players, estimated to number 1.3 million to up to 15 million.

The economists contend that according to both state and federal law, “the single most important factor in determining the legality of poker is whether poker is a game of skill or a game of luck.”

To determine how important lady luck is, Mr. Levitt and Mr. Miles analyzed results from the 2010 World Series of Poker that was held in Las Vegas and computed the net loss or gain for each of the more than 32,000 players who competed for a total of $185 million in prize money.

The tournament’s entry fee ranged from $1,000 to $50,000, for which a player receives a certain amount of chips.

The pair found that the 720 players rated as highly skilled won an average of more than $1,200 each per event, or received a 30 percent return on their initial investment. All other players averaged a loss of $400 per event, 15 percent of their investment.

The differences are “far larger in magnitude than those observed in financial markets, where fees charged by the money managers viewed as being most talented can run as high as 3 percent of assets under management and 30 percent of annual returns.”

The paper is available at the bureau’s Web site. A full explanation of the federal indictments of online poker sites can be found on Nate Silver’s FiveThirtyEight blog.

Tell us whether you think poker is mostly skill or luck. And how much did you win or lose the last time you played?

Article source: http://feeds.nytimes.com/click.phdo?i=1f31965dc9e1682809b720ddb9937237