Yahoo’s summer showdown with Carl Icahn

By Yi-Wyn Yen

The summer’s biggest shareholder showdown is finally set. Yahoo will hold its annual meeting at the Fairmont hotel in downtown San Jose on Aug. 1.

Yahoo (YHOO) originally set the date for July 3, but the meeting was postponed in anticipation of Carl Icahn’s proxy fight. The billionaire activist vows to replace Yahoo’s nine board members, including Yahoo CEO Jerry Yang, with his own slate if the company doesn’t reach a deal with Microsoft (MSFT). He has also threatened to fire Yang as CEO.

Yahoo again urged its shareholders to vote for the incumbents and not Icahn’s nominees. “OUR BOARD….URGES YOU NOT TO SIGN OR RETURN ANY PROXY CARD SENT TO YOU BY THE ICAHN ENTITIES,” the company wrote in a Securities & Exchange filing.

Many of Yahoo’s shareholders are upset that Yahoo turned down a $33-per-share offer from Microsoft. Yahoo maintains that it is still holding talks with Microsoft though the software giant withdrew its bid a month ago. Yahoo also says it is pursuing a search advertising partnership with Google (GOOG) despite antitrust concerns.

Those on the sidelines are still rooting for Icahn to make a summer miracle happen between Microsoft and Yahoo. “We estimate that Icahn and those who have already endorsed his efforts control up to some 15% of the outstanding shares,” wrote Standard & Poor’s Internet analyst Scott Kessler in a research note. “We think there is a good chance Icahn will prevail and a merger with Microsoft will eventually be consummated.”

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Filed under Advertising, Google, Microsoft-Yahoo, Yahoo, microsoft

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I can almost guarantee you that if the Icahn does win, the majority of yahoo’s engineers will leave. I wonder how much yahoo’s value will be when that happens. Honestly, I think Microsoft knows that too because the majority of Yahoo’s employees are loyal to Yahoo. That’s why Microsoft is very hesitant about Icahn getting involved. Icahn’s track record speaks for itself. Unless you own millions of shares, it’s not going to benefit the shareholders.

Posted By Anonymous : June 6, 2008 11:32 am

I think it is time Yahoo ceased to exist independently. Microsoft may be interested and willing to pay top $ now so time to maximize shareholder value. God Bless Capitalism. Greed and Fear bring out the best in man/woman.
PS: I own all 3 – YHOO, MSFT, GOOG so we shall see?

Posted By ST, Cary, NC : June 4, 2008 8:48 pm

What about the employees?
Guess they will also maximize their value with the severance pills Yang has in place?

Posted By Pandu, NY, NY : June 4, 2008 8:44 pm

I think it is time for Yahoo to not exist independently, as it is best for shareholder value maximization. It is good that Microsft may be interested and feels it needs Yahoo’s skills to battle Google. May the best company and capitalism win.
PS: I own all 3 MSFT, YHOO and GOOG. The end market forces need to prevail and guys like Yang should get the boot.

Posted By Sanjay T, Cary, NC : June 4, 2008 8:41 pm

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