Kara Swisher

Recent Posts by Kara Swisher

MicroHoo: Can We All Get Along? Um, No.

Another day, another round of internecine battling among the main players of the Internet’s longest-running soap opera.

That would be Yahoo, Microsoft and Carl Icahn.

The trio are fighting over the fate of Yahoo (YHOO) and who should control the iconic Web company.

It is a tussle that will make for daily drama until Yahoo’s Aug. 1 annual meeting, where Icahn will seek victory in his proxy fight for the company.

Who will prevail?

Will it be Yahoo’s current management, led by Co-Founder and CEO Jerry Yang, who has not exactly distinguished himself as an agent of change at the company that has surely needed it for a good long time now?

Or perhaps Microsoft (MSFT), now fully led by CEO Steve Ballmer, a company that has spent the better part of the decade not getting the Internet and flubbing most of its obvious advantages in the space?

Or Icahn, the activist investor who is not exactly a Web 2.0 kind of guy (he’s not a Web 1.0 kind of guy either, or–let’s be honest–a Web Anything.0 kind of guy)?

For shareholders, it must feel like deciding among the lesser of three evils.

Indeed, this is clearly no Harry Potter versus He-Who-Cannot- Be-Named kind of battle, even though it will be portrayed like that by all sides over the next weeks.

Already comes the dueling and deeply conflicting statements this weekend and today, after the collapse of yet another round of talks over Microsoft’s interest in buying Yahoo’s search business, in which Icahn played the peacemaker.

(Nice work, Carl! Now everyone hates each other 312 percent more! Mission accomplished!)

While such fighting is to be expected, some of the conflict will probably be much more subtle, such as the poor-little-me-but-chin-up wet kiss that Yang got from the New York Times today.

Yang even got to call Icahn a “fox in a henhouse” in the very first line of the story.

That gift was quickly followed by this doozie: “‘I don’t mean to impugn anyone’s personal integrity,’ Mr. Yang quickly added. ‘Let it never be said that Mr. Yang lacks manners.'”

But why don’t we just let it be said: Yang meant to impugn Icahn and meant to be rude, which is exactly what he has to do to save his job.

And, so it will be.

Today, for example, sources close to Microsoft were trying to make their case that the search deal they offered to Yahoo was a good one and then stressed it did not have to include Icahn, even though Icahn was deeply enmeshed in the talks last week.

And the offer was definitely a better deal: It had a much better revenue guarantee that was linked to homepage traffic versus search queries; it upped TAC (traffic acquisition cost) rates; it had a nice-sized investment and a good loan rate; and it took costs off the books.

It also featured a lot of things Yahoo management could do itself–like sell off its Asian assets.

But it was a good start, in a lot of ways.

Yet, as with all communications between Yahoo and Microsoft, acrimony instead reigned over the Icahn involvement and alleged take-it-or-leave-it deadlines and other bickered-over items, none of which makes a thimble’s worth of difference.

Ipso facto, the search deal flopped in a big, loud and unattractive heap.

For those who want to clear away the noise, here are the actual stakes:

Yang simply does not want to sell his search business wholesale and wants a second chance to try to revive Yahoo, with him or people picked by him and the board, despite his inability to do so thus far. He would sell the entire company if that’s the only choice.

Microsoft wants to own Yahoo’s search business, in order to try to at least stay in the game with its true archrival Google (GOOG), and it will do just about anything to make that happen. It does not want to buy all of Yahoo anymore.

And Icahn? Well, he just wants to be paid back what he shelled out for Yahoo shares, and a little more to save face. He does not care how this happens, as long as it does.

None of this, of course, has anything to do with what’s good for Yahoo–a site of immense and powerful assets that are now being abused daily by this twisted circus.

Of course, all sides profess to care about that and I think they even believe they mean it.

They really don’t, of course, because if they did, they would find a way to come to an agreement before the situation degenerates further.

In the New York Times article, Yang, who I believe would fall on his sword if need be, noted: “‘This isn’t about me,’ he said, with a sense of earnestness. ‘It’s about what’s going to happen to Yahoo.'”

But, if this keeps up–and I mean this with a sense of earnestness–what’s going to happen to Yahoo is a true shame.

Or, as Voldemort taunted Harry Potter: “You will lose everything.”

Latest Video

View all videos »

Search »

Nobody was excited about paying top dollar for a movie about WikiLeaks. A film about the origins of Pets.com would have done better.

— Gitesh Pandya of BoxOfficeGuru.com comments on the dreadful opening weekend box office numbers for “The Fifth Estate.”