Microsoft hosts annual meeting amid Yahoo talk

Microsoft holds its annual meeting of shareholders in Bellevue this morning as speculation swirls around its intentions toward Yahoo, the Internet giant it tried to acquire earlier this year and which is now searching for a new chief executive.

Microsoft CEO Steve Ballmer and Chairman Bill Gates typically take questions from shareholders at the meeting, which is expected to draw about 600 shareholders at Meydenbauer Center.

It will be the first time Gates or Ballmer speaks publicly since Yahoo announced Monday that co-founder Jerry Yang was resigning his position as CEO.

Microsoft offered $31 a share for Yahoo on Jan. 31, then raised its bid to $33 in May before withdrawing it entirely when Yang asked for more. Microsoft then proposed an acquisition of just Yahoo's search business — which Microsoft saw as a way to accelerate its pursuit of search leader Google.

Ballmer last commented on Yahoo a week and a half ago, after Yang had said buying Yahoo is "the best thing for Microsoft to do." The Microsoft chief repeated a version of what he has said several times since negotiations crumbled: A full acquisition is off the table, but a transaction around search is not.

"We made an offer, we made another offer ... We moved on," Ballmer said at a Sydney, Australia, business luncheon, according to Reuters. "We tried at one point to do a partnership around search ... and that didn't work either, and we moved on and they moved on. We are not interested in going back and re-looking at an acquisition. I don't know why they would be either, frankly."

On Tuesday, The Wall Street Journal quoting "a person familiar with [Ballmer's] thinking," reported that he remains interested in buying the Yahoo search business but would likely wait to make a move until Yahoo finds a new CEO.

Other items on the agenda today:

Jon Shirley, former Microsoft president and chief operating officer, is retiring from the company's board effective today, leaving a seat he has held since 1983. He retired as an executive at Microsoft in 1990. As a result of his retirement, the board is reducing its size to nine members. All nine remaining directors are nominated for re-election.

Also up for a shareholder vote:

• Terms of a new incentive plan for Microsoft executives that replaces separate cash bonus and stock-award plans. Their approval is required "to preserve Microsoft's federal income-tax deduction for performance-based compensation," according to the company's proxy filing.

• Amendments to the stock-option plan for directors not employed by Microsoft. The amendment would extend the 1999 plan until Jan. 1, 2019, and double the amount of stock that can be awarded to directors to 20,000 shares a year.

• Three shareholder proposals.

The first instructs management to "help protect freedom of access to the Internet" through such measures as resisting government demands for censorship through all legal means.

The second would establish a board committee on human rights "to review the implications of company policies, above and beyond matters of legal compliance, for the human rights of individuals in the U.S. and worldwide."

The third would request that the company "list the recipients of corporate charitable contributions of $5,000 or more on the company Web site."

The board recommended votes against all three shareholder proposals.

Benjamin J. Romano: 206-464-2149 or bromano@seattletimes.com