The battle for Yahoo’s board

Yahoo CEO Marissa Mayer delivers the keynote address Thursday, Feb. 18, 2016, at the Yahoo Mobile Developer Conference in San Francisco. (AP Photo/Eric Risberg) Yahoo CEO Marissa Mayer delivers the keynote address Thursday, Feb. 18, 2016, at the Yahoo Mobile Developer Conference in San Francisco. (AP Photo/Eric Risberg) Photo: Eric Risberg, Associated Press Photo: Eric Risberg, Associated Press Image 1 of / 1 Caption Close The battle for Yahoo’s board 1 / 1 Back to Gallery

For months, activist investors have pushed Yahoo’s board to oust CEO Marissa Mayer, to no avail.

Starting Thursday, they may try to oust the board.

Starboard Value, a hedge fund with a track record of winning board seats at large companies, is expected to wage a proxy battle for Yahoo. Shareholders can submit their slate of candidates for the board from Thursday until March 26, and the majority of Yahoo shareholders will determine the winner at the annual meeting in summer.

Who ends up controlling the board — Starboard or Yahoo’s management — will play a huge role in deciding the direction of the company, and Mayer’s fate.

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Starboard, which holds a 0.75 percent stake in Yahoo, is pushing to change the leadership and either spin off or sell Yahoo’s Internet properties.

Last month, Starboard threatened to challenge for the majority of seats on the Sunnyvale company’s board. Although Yahoo announced last week that it has hired bankers to explore a sale of the company, critics remain unconvinced that Mayer and the current board will follow through.

“The board must accept that significant changes are desperately needed,” Starboard’s managing member, Jeffrey Smith, wrote in a letter sent to Yahoo’s board in January. “This would include changes in management, changes in board composition, and changes in strategy and execution.”

Analysts say shareholders will probably support Starboard, especially after years of seeing Yahoo CEOs come and go, with no successful strategies for improving the business.

“You’ve just had a bunch of people try a bunch of different things, and nothing really worked,” said Neil Doshi, an analyst with Mizuho Securities USA Inc.

“I think that’s why there’s this hopelessness, or even helplessness, that Yahoo can’t survive as an independent company.”

Investors closely watched for signs of revival after Mayer became CEO in 2012. Under her leadership, Yahoo has invested heavily in mobile, video, social and native advertising — a category that Mayer says was relatively nonexistent before she joined.

While revenue in that category increased to nearly $1.7 billion in 2015, adjusted earnings for the core business have not shown the improvement that analysts had been looking for.

That has caused investors to pressure Yahoo’s board to sell its Internet properties and start entertaining offers from buyers. But Mayer is considered to be an obstacle to any sale, said Shyam Patil, an analyst with Susquehanna Financial Group.

“She’s probably the reason why there hasn’t been a sale,” Patil said. “People don’t have a lot of confidence that a sale would occur under her.”

Companies like Verizon have expressed interest in buying Yahoo. SunTrust Robinson Humphrey estimates that the core business, including real estate, could net $6 billion to $8 billion.

While Yahoo explores a sale of its core business, Mayer is still trying to turn around the company by focusing on fewer products, with a leaner staff. “This plan sets out to make Yahoo the very best version of itself, and I’m confident in the company’s ability to successfully execute it,” Mayer said in an earnings call with investors this month.

Because the board would need time to review any purchase offers, analysts say the soonest a sale might be announced is the second quarter. That could buy Mayer more time to turn around the core business, they said.

But those who have watched the company over the years say it’s time for Yahoo to sell before it loses even more value. Over the years, CEOs have tried to pursue e-commerce, mobile, desktop and search products, but none of them have turned the company around, Doshi said.

“Each CEO that has come into Yahoo has had their own agenda,” he said. “Yahoo has been their petri dish to implement that agenda, and each of those agendas has become failed experiments.”

Wendy Lee is a San Francisco Chronicle staff writer. Email: wlee@sfchronicle.com Twitter: @thewendylee