Yahoo + Icahn = Shareholders Lose Again or Microsoft Ad Deal?
Okay, a show of hands of those who don’t want to hear another word about how incompetent the other side is in the now-settled proxy fight between activist investor Carl Icahn and Yahoo.
Icahn, whom Yahoo insisted last week was unfit to even turn on a computer, now appears to be perfectly capable of leading the troubled Internet company as a board member, along with two cronies of his choosing (with Yahoo’s consent).
What’s not clear–except for removing uncertainty and noise–is exactly what this means for shareholders or how it gets Yahoo (YHOO) back on track or even how a possible deal with Microsoft is now struck.
BoomTown honestly does not know what to think of this development, given that Yang seemed to have the upper hand in the fight after Icahn started looking too greedy in a power grab with Microsoft (MSFT) for Yahoo assets in recent weeks.
Why then give in to Icahn now? I guess to stop the annual meeting on Aug. 1 from being a three-ring circus and to take the focus off of the battle right before Yahoo announces its second-quarter earnings tomorrow against a strong economic headwind that already knocked over both Google (GOOG) and Microsoft.
(And, by the way, Yahoo’s proxyfacts.yahoo.com attack on Icahn is now miraculously gone!)
From a let’s-be-safe perspective, it’s the right move, shutting up Icahn a little bit. He’s still going on about doing some sort of Microsoft deal, of course, in order to recoup his losses on the shares he bought in Yahoo.
But unless the newly constituted board is now jetting up to Redmond en masse with a magic potion that will convince Microsoft to fork over $33 a share (remember, the old board members will get sued if they accept less), Icahn might have to cool his heels a while before Yahoo excels again.
In fact, with the old board in place–minus Activision (ACTI) CEO Bobby Kotick, who has got to be breathing a deep sigh of relief, since he does a lot of business with Microsoft–and the Icahn trio, it feels more than a little unwieldy, block-prone and probably deeply confusing.
Kind of like the United Nations, but not as well organized.
So, you get the picture of how an 11-member board works, right? The lugubrious quicksand of Yahoo prevails!
One hopes Yahoo CEO Jerry Yang–who kind of played BoomTown and the rest of us with his genuinely fake emotional expressions of horror about Icahn and distaste for Microsoft for joining with him–is now prepping another Oscar-winning performance to convince Microsoft CEO Steve Ballmer that he likes him, he really likes him.
Still, it’s nice to see former AOL head Jon Miller added to the list of possible choices for the Icahn seats.
At least the definitely competent Miller is someone who knows a thing or two about reviving an iconic Web brand in turmoil, from his stint taking over the Time Warner (TWX) unit just after the merger with AOL failed and everyone at AOL bugged out carrying sacks of money.
Speaking of sacks of money, Icahn does not get one here and neither does any other shareholder in this scenario. It seems that now the real work will begin for Yahoo.
My prediction, given the amount of bile Yang has been throwing at Microsoft: A delegation is already knocking at the door of Microsoft HQ talking about a new search deal it is willing to entertain now that Icahn taking over Yahoo is not the sticking point.
Because, for better or worse, Icahn has been bought and paid for by Yahoo.
Now, perhaps it is Yahoo’s turn to get the same treatment from Microsoft. Unless, of course, Yang has another big idea for turning Yahoo around.
In that case, Jerry, we’re all ears.