In the ongoing talent drain at Yahoo, longtime Yahoo search veteran Chi-Chao Chang (pictured right) is the next to swirl away from the Internet giant.

Chang was VP and GM of the global search business at Yahoo and has been at the company since 1999.

More importantly, he has been a key exec in Yahoo’s troubled search alliance with Microsoft, so there’s another plus for Yahoo (and by plus, I mean minus). It is not clear where Chang is headed.

On his LinkedIn profile, Chang described his job thus:

“I am responsible for Yahoo’s global search operations and marketplace, and am the executive manager of the Microsoft Search Alliance for the US/CA marketplace. My team runs in-region operations and marketplace analysis for Americas, Asia and Europe.”

But that’s not all today!

Also departing Yahoo is a top PR exec, May Petry (pictured left). She has held a number of different communications jobs at Yahoo over the years, including for its Connected Life unit, corporate and, most recently, for its Americas unit. Petry, who has previously worked at BEA Systems and Sun Microsystems, will head to Hewlett-Packard to run PR for its webOs unit.

(Note to May: I am just as interested in that action-packed business, so get ready!)

I contacted Yahoo for a comment (but let’s just assume I am right, because I am).

Enterprise applications themselves, Chuang says, have to change. And that requires a platform to build new applications that are social from the start. The company has built what it calls the Workplace Interaction Network, or WIN. It’s a development platform that lets companies build and deploy their own cloud-based enterprise applications that take into account the connections that employees have within the company and with customers and partners on the outside.

The company is announcing today that it has landed a $12.6 million Series A funding round led by Andreessen Horowitz, the VC fund led by Opsware founders Marc Andreessen and Ben Horowitz. Also involved in the round are Chuang himself (pictured) and another angel investor, Bill Janeway, former vice chairman of Warburg Pincus. (Andreessen Horowitz is having a busy week.)

Millions of Facebook and Twitter and LinkedIn users implies there’s a huge amount of value in bringing the social factors into existing and still-to-be-created kinds of enterprise applications. It’s a crazy area of interest in the marketplace right now. That Salesforce.com chose to launch Chatter with an ad during the Super Bowl and that companies like Jive Software are attracting funding and seriously eyeing an IPO suggest that a fundamental shift in enterprise applications is underway, but it’s still early days. Most businesses, Chuang writes on his blog, still don’t get it.

“It’s almost impossible to believe, but after hundreds of millions of people worldwide have embraced social applications in nearly every aspect of their personal lives, businesses are still resisting social applications,” he writes. “In fact, many enterprises have not made any significant investment in social applications despite obvious use cases for customer service, HR, marketing, product development, recruiting, sales, training and much more.”

Like it or not, he says, employees are using these new lines of communication to get work done, and companies can either turn this trend to their advantage or get left behind. “When you stop to think about it, an employee’s network (and their ability to communicate and collaborate) is what really fuels business,” Chuang writes.

AH partner Ben Horowitz writes on his blog announcing the funding deal, and describes Chuang as the CEO he “admired most during the last decade.” Why? For getting behind and pushing through–over the objections of a skeptical board of directors–BEA’s 1998 acquisition of a little company called WebLogic. It was an early leader in the application server market and went on to grow into a significant portion of BEA’s business. His board convinced, Chuang was promoted to BEA’s CEO in 2001. Ultimately–and as Horowitz puts it, thanks to shortsighted shareholders–BEA became part of Oracle in 2008.

“The transition from today’s Web back-end architectures to tomorrow’s cloud computing will result in profound benefits,” Horowitz writes. “Over time, every existing application will be rewritten to take advantage of the cloud and these benefits. In addition, an incredible new class of never-before-possible applications will be developed.” Change is coming. Get ready.

Sources said a more substantial public announcement has been pushed by Yahoo’s board–apparently, an internal email to employees was considered too–to show Yahoo’s new team and that the company still has a strong bench, despite a lot of exec departures of late.

As we already wrote, the structure will pivot on several key execs, reporting to President Sue Decker.

EVP of Yahoo’s Platforms and Infrastructure division Ash Patel as head of a new Audience Products group (its name was changed from Global Products); Global Partner Solutions EVP Hilary Schneider as the head of a new U.S unit; various folks running around the rest of the globe.

There will also be another strategy team group with a new head, who has not yet been chosen.

And Yahoo will name Scott Dietzen (pictured, right) to take over part of the job of SVP Brad Garlinghouse, who running was running all communications properties and products. Dietzen will get the communications portfolio, which includes email and messaging, all under Patel.

(Community properties like Flickr will actually move under Front Door Head Tapan Bhat, who also reports to Patel.)

Dietzen was the president and CTO of Zimbra (and before that CTO of BEA Systems), the highly innovative open-source email startup Yahoo bought last fall for $350 million.

Garlinghouse (pictured, left), as we reported last night, will not be officially leaving until the end of the summer, though. He is currently traveling in Asia, sources said, and has not yet decided on a new gig.

He is, of course, the man who wrote the infamous “Peanut Butter Manifesto,” which first revealed deep tension within Yahoo.

Yahoo is likely to also announce changes in the engineering organization under CTO Ari Balogh, who is also orchestrating some massive and much-needed changes in the arena at Yahoo.

If Yahoo CEO Jerry Yang thought Microsoft CEO Steve Ballmer was scary, meet persnickety investor Carl Icahn.

According to CNBC, which was doubtlessly leaked the threat by the clever billionaire to test the waters, he has bought as much as 50 million shares in the troubled Internet company as part of a potential proxy fight.

Following the CNBC report, The Wall Street Journal reported that Icahn was leaning toward launching the proxy fight, using that 4% stake he has apparently amassed since the Yahoo-Microsoft tussle ended May 3.

Another activist investor, The Journal said, also thinking of getting involved was Firebrand Partners’ Scott Galloway, also known as the thorn in the New York Times’s side. (His SuperPoking inexplicably did nab him a board seat.)

Oh, dear.

But sharks do come when there is blood in the water, of course, as there has been since Microsoft (MSFT) abandoned its takeover quest for Yahoo (YHOO) after repeated rejection from Yang and its board.

It is not clear what Microsoft will do.

Icahn’s efforts seems clever, using similar tactics as he did in the BEA Systems-Oracle fight, trying to get just a few board seats to force Yahoo to sell to Microsoft.

But he better hurry–anyone wishing to wage such a proxy battle has until Thursday to do so to get on the slate at Yahoo’s July board meeting.

In honor of the Icahn entry, here’s an anticipatory video for Yang for the meeting, so he knows just what’s coming:

1. Yahoo Shareholders Reject Plan to Tie Executive Compensation to Company’s Crappy Performance
   Well, what do you know: Yahoo’s annual shareholder meeting didn’t conclude with CEO Terry Semel’s head piked on the exclamation point of the Yahoo sign outside company headquarters.

2. I Know It Was You, Fredo. You Broke My Heart. You Broke My Heart!
   Apparently, Fred Anderson is the “Fredo” of the Apple options backdating family.

3. We’ve Asked John Williams to Do a Special Performance of the Theme From “The Poseidon Adventure” for Our Q4 Results
   Who’s programming Microsoft’s on-hold music, Apple’s Phil Schiller? Waiting for the company’s third-quarter earnings call to begin yesterday, those listening in were treated to an instrumental piano version of Celine Dion’s “My Heart Will Go On.” From “Titanic,” the disaster movie.

4. I’m Proud to Say Our New “Soylent Green” iPod Is Made of 100% Biodegradable Greenpeace Activists!
   If you’re going to try to smear Apple for reckless environmental practices, you best have some hard epidemiological and toxicological data on hand, because goofy Photoshop treatments of the company’s marketing materials just can’t stand up to a blow from the Apple PR machine.

5. And Online Display Impressions Soared as More Americans Checked Their AOL Accounts for Old Times’ Sake
   To hear tell from Time Warner executives, the company’s better-than-expected earnings for the first quarter owed quite a bit to gains in online-advertising market share by its AOL Internet division.

6. Web 2.0 Audience in Mirror May Be Smaller Than It Appears
   How ironic is it that Web 2.0–the “participatory Web”–has far fewer participants than its architects would have us believe?

7. And for My Next Trick, I’ll Turn Myself Into a Complete Jackass
   If you’re going to demand that YouTube remove a video to which you object under the Digital Millennium Copyright Act, it’s probably wise to make sure that you actually understand the DMCA.

8. War Is Peace. Freedom Is Slavery. Ignorance Is Strength. DRM Is DCE.
   You can’t put frosting on manure, but HBO’s Chief Technology Officer Bob Zitter isn’t above trying.

9. We’re Naming It the Motorola STNKR, After Our Q1 Earnings …
   Carl Icahn was right. Motorola really is desperate for a new product. How else to explain a patent the company was awarded last month for a “communication device having a scent-release feature and method thereof.”

10. The Frienemy of My Frienemy Is My Enemiend
    If Microsoft is planning an acquisition in the online marketing and advertising space, it better act fast, because if it waits much longer there won’t be anything left to acquire.

11. How Would Monsieur Ellison Like His BEA Served? Mixed in a Bucket With Oracle’s Other Acquisitions?
    Looks like we may be in for another PeopleSoft-esque takeover drama …

12. I’m Just Biding My Time Here Until I Can Quit and Study Whale Feces Full Time
    Given the chance, how would you alter the course of your career? Well, if you worked at Microsoft’s Security Response Center, you might consider taking a job as an Olympic drug tester, a gravity research subject, or a “whale-feces researcher.”

13. Much Like Energy, BS Cannot Be Created or Destroyed, It Can Only Be Changed From One Form to Another
    If Steorn’s perpetual motion effort is anything like its e-commerce venture (and by all accounts things do seem to be going that way), the only thing in its future is insolvency.

14. From Now On, We’ll Be Known as Nlsn/NtRtings
    Looks like vowels won’t be the only accoutrements to be tossed aside in the rise of Web 2.0. The venerable page view is to be abandoned as well.

15. The Defendant Stands Accused of Copyright Infringement, Breach of Contract and Misappropriation of Dumb Luck
    According to popular legend Facebook founder Mark Zuckerberg once kept two versions of his business card in his wallet–one with the title CEO, the other with “I’M CEO . . . BITCH.”

16. Well, Here Come YouTube’s Video ID Tools. Guess That Means Godot Will Be Here Any Minute Now
    Google’s apparently finished “educating users about copyright law” and has moved on to the far more important business of making sure not to run afoul of it.

17. Look at It This Way: Now That Yahoo’s an ‘Ecosystem,’ the EPA Can Finally Declare It a Superfund Site
    “Our financial performance is not what we would like to see long-term.” This, from Blake Jorgensen, Yahoo’s chief financial officer who, just six weeks into the job, is already well versed in the company’s fiscal truisms.

18. Gates to Google: My Lyrical Technique Will Leave Your Body Weak
    Much as Microsoft Chairman Bill Gates fancies himself untroubled by Google’s incursions into his software empire, they clearly do chafe him a bit.

19. Newest Yahoo Mail Feature: BCC Beijing
    Sure, Yahoo signed China’s “Public Pledge on Self-Discipline for the Chinese Internet Industry,” a voluntary agreement to monitor and restrict information deemed “harmful” by Beijing, but did it have to take it quite so seriously?

20. Apple: Wham, Bam, Thank You Fanboi
    “I feel like a $200 whore.” That was one iPhone early adopter’s crass assessment of his feelings of self-worth, after Apple unexpectedly cut the price of the device by a third–just two months after it arrived at market.

21. In the Unlikely Event of a Water Landing, Sergey’s California King May Be Used as a Flotation Device
    With its onboard hammocks, full-size sofas and California King beds, it’s a wonder Google’s “party plane” has room for scientific instrumentation befitting the National Aeronautics and Space Administration, but apparently it does.

22. Act Now and Get a Downgrade to the OS You Really Want, ABSOLUTELY FREE!
    It’s looking more and more like the pent-up demand for Windows Vista we’ve heard so much about this past year is really just pent-up demand for Windows XP.

23. Dude, I Work for Friggin Forbes Magazine. Have You Heard of It?
    The year-long guessing game is over. New York Times reporter Brad Stone has outed Daniel Lyons, a senior editor at Forbes magazine, as the author of the Secret Diary of Steve Jobs, the satirical blog lampooning Apple’s iconic CEO (See? Told you it wasn’t me).

24. If Facebook’s Worth $15 Billion, Then My Stupid Idea’s Got to Be Good for $10 Mil
    Apparently the vainglory from which Facebook CEO Mark Zuckerberg appears to suffer is communicable and spreading rapidly throughout the social network’s developer community.

25. A Billion Here, a Billion There, and Pretty Soon You’re Talking Real Bollocks
    MySpace is worth $65 billion in the same way that Facebook is worth $15 billion–hypothetically.

26. “Apple Has Destroyed the Music Business”–Not That We Didn’t Try Our Best
    Many, many years ago, when the digital-music business consisted of little else besides Napster and the Recording Industry Association of America’s lawsuits against it, Apple proved that there was indeed a decent business to be had in selling music online for $1 per song.

27. It’s Not an Unpaid Endorsement, It’s a “Social Ad”
    Facebook’s Social Ads aren’t endorsements, they’re a “representation” of user activity.

28. Obama Announces “No Tech Policy Left Behind” Plan
    If Google’s mission is to organize the world’s information and make it universally accessible and useful, then Democratic presidential candidate Barack Obama’s is to do the same to its tech-policy issues.

29. Sounds More Like the “Zune of Reading” to Me
    If Jeff Bezos truly hopes to create “the iPod of reading,” observers say he’s going to have to do a hell of a lot better than Amazon’s new Kindle e-book reader.

30. Fiascobook
    What Facebook CEO Mark Zuckerberg lacks in foresight, he certainly makes up for in disingenuous hair-shirt remorse.

1. Yahoo Shareholders Reject Plan to Tie Executive Compensation to Company’s Crappy Performance
   Well, what do you know: Yahoo’s annual shareholder meeting didn’t conclude with CEO Terry Semel’s head piked on the exclamation point of the Yahoo sign outside company headquarters.

2. I Know It Was You, Fredo. You Broke My Heart. You Broke My Heart!
   Apparently, Fred Anderson is the “Fredo” of the Apple options backdating family.

3. We’ve Asked John Williams to Do a Special Performance of the Theme From “The Poseidon Adventure” for Our Q4 Results
   Who’s programming Microsoft’s on-hold music, Apple’s Phil Schiller? Waiting for the company’s third-quarter earnings call to begin yesterday, those listening in were treated to an instrumental piano version of Celine Dion’s “My Heart Will Go On.” From “Titanic,” the disaster movie.

4. I’m Proud to Say Our New “Soylent Green” iPod Is Made of 100% Biodegradable Greenpeace Activists!
   If you’re going to try to smear Apple for reckless environmental practices, you best have some hard epidemiological and toxicological data on hand, because goofy Photoshop treatments of the company’s marketing materials just can’t stand up to a blow from the Apple PR machine.

5. And Online Display Impressions Soared as More Americans Checked Their AOL Accounts for Old Times’ Sake
   To hear tell from Time Warner executives, the company’s better-than-expected earnings for the first quarter owed quite a bit to gains in online-advertising market share by its AOL Internet division.

6. Web 2.0 Audience in Mirror May Be Smaller Than It Appears
   How ironic is it that Web 2.0–the “participatory Web”–has far fewer participants than its architects would have us believe?

7. And for My Next Trick, I’ll Turn Myself Into a Complete Jackass
   If you’re going to demand that YouTube remove a video to which you object under the Digital Millennium Copyright Act, it’s probably wise to make sure that you actually understand the DMCA.

8. War Is Peace. Freedom Is Slavery. Ignorance Is Strength. DRM Is DCE.
   You can’t put frosting on manure, but HBO’s Chief Technology Officer Bob Zitter isn’t above trying.

9. We’re Naming It the Motorola STNKR, After Our Q1 Earnings …
   Carl Icahn was right. Motorola really is desperate for a new product. How else to explain a patent the company was awarded last month for a “communication device having a scent-release feature and method thereof.”

10. The Frienemy of My Frienemy Is My Enemiend
    If Microsoft is planning an acquisition in the online marketing and advertising space, it better act fast, because if it waits much longer there won’t be anything left to acquire.

11. How Would Monsieur Ellison Like His BEA Served? Mixed in a Bucket With Oracle’s Other Acquisitions?
    Looks like we may be in for another PeopleSoft-esque takeover drama …

12. I’m Just Biding My Time Here Until I Can Quit and Study Whale Feces Full Time
    Given the chance, how would you alter the course of your career? Well, if you worked at Microsoft’s Security Response Center, you might consider taking a job as an Olympic drug tester, a gravity research subject, or a “whale-feces researcher.”

13. Much Like Energy, BS Cannot Be Created or Destroyed, It Can Only Be Changed From One Form to Another
    If Steorn’s perpetual motion effort is anything like its e-commerce venture (and by all accounts things do seem to be going that way), the only thing in its future is insolvency.

14. From Now On, We’ll Be Known as Nlsn/NtRtings
    Looks like vowels won’t be the only accoutrements to be tossed aside in the rise of Web 2.0. The venerable page view is to be abandoned as well.

15. The Defendant Stands Accused of Copyright Infringement, Breach of Contract and Misappropriation of Dumb Luck
    According to popular legend Facebook founder Mark Zuckerberg once kept two versions of his business card in his wallet–one with the title CEO, the other with “I’M CEO . . . BITCH.”

16. Well, Here Come YouTube’s Video ID Tools. Guess That Means Godot Will Be Here Any Minute Now
    Google’s apparently finished “educating users about copyright law” and has moved on to the far more important business of making sure not to run afoul of it.

17. Look at It This Way: Now That Yahoo’s an ‘Ecosystem,’ the EPA Can Finally Declare It a Superfund Site
    “Our financial performance is not what we would like to see long-term.” This, from Blake Jorgensen, Yahoo’s chief financial officer who, just six weeks into the job, is already well versed in the company’s fiscal truisms.

18. Gates to Google: My Lyrical Technique Will Leave Your Body Weak
    Much as Microsoft Chairman Bill Gates fancies himself untroubled by Google’s incursions into his software empire, they clearly do chafe him a bit.

19. Newest Yahoo Mail Feature: BCC Beijing
    Sure, Yahoo signed China’s “Public Pledge on Self-Discipline for the Chinese Internet Industry,” a voluntary agreement to monitor and restrict information deemed “harmful” by Beijing, but did it have to take it quite so seriously?

20. Apple: Wham, Bam, Thank You Fanboi
    “I feel like a $200 whore.” That was one iPhone early adopter’s crass assessment of his feelings of self-worth, after Apple unexpectedly cut the price of the device by a third–just two months after it arrived at market.

21. In the Unlikely Event of a Water Landing, Sergey’s California King May Be Used as a Flotation Device
    With its onboard hammocks, full-size sofas and California King beds, it’s a wonder Google’s “party plane” has room for scientific instrumentation befitting the National Aeronautics and Space Administration, but apparently it does.

22. Act Now and Get a Downgrade to the OS You Really Want, ABSOLUTELY FREE!
    It’s looking more and more like the pent-up demand for Windows Vista we’ve heard so much about this past year is really just pent-up demand for Windows XP.

23. Dude, I Work for Friggin Forbes Magazine. Have You Heard of It?
    The year-long guessing game is over. New York Times reporter Brad Stone has outed Daniel Lyons, a senior editor at Forbes magazine, as the author of the Secret Diary of Steve Jobs, the satirical blog lampooning Apple’s iconic CEO (See? Told you it wasn’t me).

24. If Facebook’s Worth $15 Billion, Then My Stupid Idea’s Got to Be Good for $10 Mil
    Apparently the vainglory from which Facebook CEO Mark Zuckerberg appears to suffer is communicable and spreading rapidly throughout the social network’s developer community.

25. A Billion Here, a Billion There, and Pretty Soon You’re Talking Real Bollocks
    MySpace is worth $65 billion in the same way that Facebook is worth $15 billion–hypothetically.

26. “Apple Has Destroyed the Music Business”–Not That We Didn’t Try Our Best
    Many, many years ago, when the digital-music business consisted of little else besides Napster and the Recording Industry Association of America’s lawsuits against it, Apple proved that there was indeed a decent business to be had in selling music online for $1 per song.

27. It’s Not an Unpaid Endorsement, It’s a “Social Ad”
    Facebook’s Social Ads aren’t endorsements, they’re a “representation” of user activity.

28. Obama Announces “No Tech Policy Left Behind” Plan
    If Google’s mission is to organize the world’s information and make it universally accessible and useful, then Democratic presidential candidate Barack Obama’s is to do the same to its tech-policy issues.

29. Sounds More Like the “Zune of Reading” to Me
    If Jeff Bezos truly hopes to create “the iPod of reading,” observers say he’s going to have to do a hell of a lot better than Amazon’s new Kindle e-book reader.

30. Fiascobook
    What Facebook CEO Mark Zuckerberg lacks in foresight, he certainly makes up for in disingenuous hair-shirt remorse.

Turns out William Klein, BEA Systems’ vice-president of business planning and development, was sorely mistaken when he said “BEA is worth substantially more to Oracle, to others and, importantly, to our shareholders than the price” Oracle offered for it. Certainly, that’s the opinion of Oracle CEO Larry Ellison, who says any future Oracle takeover bid for BEA Systems–if there ever is one–will be for less than the $7 billion it offered last month.

“If we made another offer [for BEA], the price would be lower,” Ellison said at Oracle’s annual analyst meeting yesterday. “Clearly the $17 price seems too high today. It seems unlikely anyone will want to buy them now. … If their goal was to stay independent, I think they’re doing a good job.“

That said, Oracle’s BEA experience hasn’t exactly put Ellison off his feed. “We are now looking at our second favorite stocks and we have found some attractive” ones, he said.

Turns out William Klein, BEA Systems’ vice-president of business planning and development, was sorely mistaken when he said “BEA is worth substantially more to Oracle, to others and, importantly, to our shareholders than the price” Oracle offered for it. Certainly, that’s the opinion of Oracle CEO Larry Ellison, who says any future Oracle takeover bid for BEA Systems–if there ever is one–will be for less than the $7 billion it offered last month.

“If we made another offer [for BEA], the price would be lower,” Ellison said at Oracle’s annual analyst meeting yesterday. “Clearly the $17 price seems too high today. It seems unlikely anyone will want to buy them now. … If their goal was to stay independent, I think they’re doing a good job.”

That said, Oracle’s BEA experience hasn’t exactly put Ellison off his feed. “We are now looking at our second favorite stocks and we have found some attractive” ones, he said.

On Oct. 9, Oracle proposed to acquire BEA for $17 per share. That offer expired today, Oct. 28, at 5 p.m. BEA shareholders should not assume that Oracle will renew its $17-per-share offer in the future.

“Over time many things can change: BEA’s business might materially weaken, the stock market can fall further from its recent record highs, or Oracle may have committed its capital elsewhere. Over the last 20 days, the BEA Board has repeatedly rejected our offer and refused to meet with us, even though we offered to meet without any preconditions. We asked the BEA Board to allow their shareholders to vote on our $17-per-share proposal. They chose not to. If the BEA shareholders are unhappy with the behavior of the BEA Board, it is up to those shareholders, not Oracle, to take the appropriate action.”

And by “BEA shareholders,” Oracle clearly meant one BEA shareholder in particular–Carl Icahn, who owns 13.2% of BEA’s outstanding shares, and has for some time now been pushing the company to put itself up for sale.

And Icahn did not disappoint. The billionaire investor filed suit against BEA, demanding it hold a shareholder meeting to consider the auction of the company. “BEA should allow its shareholders to decide the fate of BEA by conducting an auction sale process and allowing the shareholders to accept or reject the proposal made by the highest bidder,” Icahn wrote in a letter to BEA’s board. “BEA should not allow the stalking-horse bid from Oracle to disappear (failure to take the Oracle bid as a stalking horse would be a grave dereliction of your fiduciary duty in my view). If a topping bid arises, then all the better. But if no topping bid arises, it should be up to the BEA shareholders to decide whether to take the Oracle bid or remain as an independent company.”

BEA’s board, for its part, insists that it’s not opposed to selling the company, it’s just opposed to selling it to Oracle for $17 per share. But it may end up doing just that, given the company’s current financial situation and shareholder pressure that’s only just beginning to build. “BEA is in a tailspin,” Cowen & Co. analyst Peter Goldmacher told Bloomberg. “At $17, it would be a graceful exit for BEA, which has been in rough shape for a while. … BEA is badly miscalculating Oracle’s desire. Oracle doesn’t need BEA. At some point, Oracle will buy these guys, but it’s completely at Oracle’s discretion.”

On Oct. 9, Oracle proposed to acquire BEA for $17 per share. That offer expired today, Oct. 28, at 5 p.m. BEA shareholders should not assume that Oracle will renew its $17-per-share offer in the future.

“Over time many things can change: BEA’s business might materially weaken, the stock market can fall further from its recent record highs, or Oracle may have committed its capital elsewhere. Over the last 20 days, the BEA Board has repeatedly rejected our offer and refused to meet with us, even though we offered to meet without any preconditions. We asked the BEA Board to allow their shareholders to vote on our $17-per-share proposal. They chose not to. If the BEA shareholders are unhappy with the behavior of the BEA Board, it is up to those shareholders, not Oracle, to take the appropriate action.”

And by “BEA shareholders,” Oracle clearly meant one BEA shareholder in particular–Carl Icahn, who owns 13.2% of BEA’s outstanding shares, and has for some time now been pushing the company to put itself up for sale.

And Icahn did not disappoint. The billionaire investor filed suit against BEA, demanding it hold a shareholder meeting to consider the auction of the company. “BEA should allow its shareholders to decide the fate of BEA by conducting an auction sale process and allowing the shareholders to accept or reject the proposal made by the highest bidder,” Icahn wrote in a letter to BEA’s board. “BEA should not allow the stalking-horse bid from Oracle to disappear (failure to take the Oracle bid as a stalking horse would be a grave dereliction of your fiduciary duty in my view). If a topping bid arises, then all the better. But if no topping bid arises, it should be up to the BEA shareholders to decide whether to take the Oracle bid or remain as an independent company.”

BEA’s board, for its part, insists that it’s not opposed to selling the company, it’s just opposed to selling it to Oracle for $17 per share. But it may end up doing just that, given the company’s current financial situation and shareholder pressure that’s only just beginning to build. “BEA is in a tailspin,” Cowen & Co. analyst Peter Goldmacher told Bloomberg. “At $17, it would be a graceful exit for BEA, which has been in rough shape for a while. … BEA is badly miscalculating Oracle’s desire. Oracle doesn’t need BEA. At some point, Oracle will buy these guys, but it’s completely at Oracle’s discretion.”

In a letter to BEA late Tuesday night, Oracle President Charles Phillips rejected, with barely restrained incredulity, BEA’s proposed acquisition price of $21 per share. “We believe that your counterproposal at $21 per share price is an impossibly high price for Oracle or any other potential acquirer,” Phillips wrote. “At $21 per share, the BEA board is asking for an 80% premium to BEA’s stock price before the appearance of activist shareholders who are pushing the BEA board to sell the company. The $21 per share price is a multiple of nearly 11 times BEA’s last 12 months reported maintenance revenues. Nobody would seriously consider paying that kind of multiple for a software company with shrinking new license sales. Furthermore, no other company has come forward to bid for BEA. Our proposal at $17 per share is the only offer. Apparently no other companies think that BEA is worth $17 per share, let alone $21 per share. Accordingly, we repeat our proposal to purchase BEA at $17 per share, a price that we are unwilling to increase. We do not believe BEA is worth more than that and we have an obligation to our own shareholders to exercise price discipline when evaluating acquisition opportunities.”

“Nobody would seriously consider paying that kind of multiple.” Suffice to say, that little barb did not go over well at BEA, which rejected Oracle’s $6.7 billion takeover offer a third time this morning. “As fiduciaries, our board cannot endorse a proposal that it has concluded significantly undervalues BEA,” William Klein, BEA’s vice president of business planning and development, said in a letter to Phillips. “We therefore assume that your proposal will expire on Oct. 28.”

In a letter to BEA late Tuesday night, Oracle President Charles Phillips rejected, with barely restrained incredulity, BEA’s proposed acquisition price of $21 per share. “We believe that your counterproposal at $21 per share price is an impossibly high price for Oracle or any other potential acquirer,” Phillips wrote. “At $21 per share, the BEA board is asking for an 80% premium to BEA’s stock price before the appearance of activist shareholders who are pushing the BEA board to sell the company. The $21 per share price is a multiple of nearly 11 times BEA’s last 12 months reported maintenance revenues. Nobody would seriously consider paying that kind of multiple for a software company with shrinking new license sales. Furthermore, no other company has come forward to bid for BEA. Our proposal at $17 per share is the only offer. Apparently no other companies think that BEA is worth $17 per share, let alone $21 per share. Accordingly, we repeat our proposal to purchase BEA at $17 per share, a price that we are unwilling to increase. We do not believe BEA is worth more than that and we have an obligation to our own shareholders to exercise price discipline when evaluating acquisition opportunities.”

“Nobody would seriously consider paying that kind of multiple.” Suffice to say, that little barb did not go over well at BEA, which rejected Oracle’s $6.7 billion takeover offer a third time this morning. “As fiduciaries, our board cannot endorse a proposal that it has concluded significantly undervalues BEA,” William Klein, BEA’s vice president of business planning and development, said in a letter to Phillips. “We therefore assume that your proposal will expire on Oct. 28.”

BEA Systems said this morning it is willing to consider Oracle’s takeover agreement, or one put forth by another potential purchaser, but only if it is willing to pony up $21 a share, or $8.2 billion.

And it will “vigorously oppose” any purchase attempts for less. “We continue to believe that Oracle’s unsolicited proposal to acquire BEA at $17 per share significantly undervalues BEA, and is therefore not in the best interests of BEA shareholders,” BEA’s board said in a statement. “Accordingly, we will continue to vigorously oppose a sale to Oracle at $17 per share. Over the last several weeks, Oracle has repeatedly asked us for the price at which we would be willing to begin negotiations, and the Board has concluded, after consultation with its financial adviser Goldman Sachs, that it is prepared to authorize negotiations with third parties including Oracle at a price of $21 per share.”

Seems BEA isn’t too worried about missing the deadline Oracle set for BEA to accept its “generous” original bid. Question now is, whether that bid is a PeopleSoft-style “best and final offer”–i.e., one that can be sweetened a bit or a final “best and final offer.”

BEA Systems said this morning it is willing to consider Oracle’s takeover agreement, or one put forth by another potential purchaser, but only if it is willing to pony up $21 a share, or $8.2 billion.

And it will “vigorously oppose” any purchase attempts for less. “We continue to believe that Oracle’s unsolicited proposal to acquire BEA at $17 per share significantly undervalues BEA, and is therefore not in the best interests of BEA shareholders,” BEA’s board said in a statement. “Accordingly, we will continue to vigorously oppose a sale to Oracle at $17 per share. Over the last several weeks, Oracle has repeatedly asked us for the price at which we would be willing to begin negotiations, and the Board has concluded, after consultation with its financial adviser Goldman Sachs, that it is prepared to authorize negotiations with third parties including Oracle at a price of $21 per share.”

Seems BEA isn’t too worried about missing the deadline Oracle set for BEA to accept its “generous” original bid. Question now is, whether that bid is a PeopleSoft-style “best and final offer”–i.e., one that can be sweetened a bit or a final “best and final offer.”

You have to take a broader view and realize this is an industry like any other–telecom, railroads. They went through consolidation. Why shouldn’t the computer industry be any different? This shouldn’t have been a surprise to anybody. But it seemed to be, and a lot of people thought I was nuts when I said these things. And that’s why we’re out there alone as a consolidator.”

–Oracle CEO Larry Ellison, Forbes magazine, July 2006

Will BEA Systems go down in history as the place where the Ellisonian consolidation wave sweeping the business-software market finally broke and rolled back? Not likely, but at the moment it’s doing a passable job of holding it back. This week the company rejected Oracle’s $17-per-share, unsolicited takeover offer for the second time, refusing even to meet with the company to discuss it.

And so Oracle is turning up the heat a bit. In a letter to BEA’s board, Oracle President Charles Phillips said it will walk away from its proposal if BEA doesn’t accept it or put it before shareholders for a vote.

Dear Members of the Board of Directors:

“Last night we were told by Bill Klein, Vice President-Business Planning and Development (speaking on behalf of the board), that BEA’s board again rejected our proposed price of $17 per share in cash. The board has refused to meet with us since we made our Oct. 9 proposal.
Oracle urges the BEA board of directors to let BEA’s shareholders decide: sign an acquisition agreement with Oracle and allow the shareholders to vote. Oracle believes that our $17 per share price is generous and there are no offers for BEA above $17 per share. $17 per share represents:

• a 21% premium to BEA’s closing price of $14.05 on the date before we
  made our proposal;

• a 31.5% premium to $12.93, the 52-week average before our proposal;
• a 44% premium to $11.77, BEA’s stock price on the date immediately
  prior to the date that activist shareholders disclosed their position
  in BEA; and

• a price higher than BEA’s five-year high before our proposal.

“Oracle has no interest in a long, drawn-out process to acquire BEA. If the BEA board refuses to execute an acquisition agreement and refuses to let their shareholders vote, then our $17-per-share proposal to acquire BEA will expire at 5 p.m. PDT, on Sunday, Oct. 28.

Sincerely,

ORACLE CORPORATION

Interesting move, eh? More so given its impact on BEA’s share price today. Prior to Oracle’s offer, BEA was trading at $14.05 per share. After it, the stock hit $18.58. This morning, it’s trading at $17.98–down 3.28% on fears that Oracle will rescind its offer.

You have to take a broader view and realize this is an industry like any other–telecom, railroads. They went through consolidation. Why shouldn’t the computer industry be any different? This shouldn’t have been a surprise to anybody. But it seemed to be, and a lot of people thought I was nuts when I said these things. And that’s why we’re out there alone as a consolidator.”

–Oracle CEO Larry Ellison, Forbes magazine, July 2006

Will BEA Systems go down in history as the place where the Ellisonian consolidation wave sweeping the business-software market finally broke and rolled back? Not likely, but at the moment it’s doing a passable job of holding it back. This week the company rejected Oracle’s $17-per-share, unsolicited takeover offer for the second time, refusing even to meet with the company to discuss it.

And so Oracle is turning up the heat a bit. In a letter to BEA’s board, Oracle President Charles Phillips said it will walk away from its proposal if BEA doesn’t accept it or put it before shareholders for a vote.

Dear Members of the Board of Directors:

“Last night we were told by Bill Klein, Vice President-Business Planning and Development (speaking on behalf of the board), that BEA’s board again rejected our proposed price of $17 per share in cash. The board has refused to meet with us since we made our Oct. 9 proposal.
Oracle urges the BEA board of directors to let BEA’s shareholders decide: sign an acquisition agreement with Oracle and allow the shareholders to vote. Oracle believes that our $17 per share price is generous and there are no offers for BEA above $17 per share. $17 per share represents:

• a 21% premium to BEA’s closing price of $14.05 on the date before we
  made our proposal;

• a 31.5% premium to $12.93, the 52-week average before our proposal;
• a 44% premium to $11.77, BEA’s stock price on the date immediately
  prior to the date that activist shareholders disclosed their position
  in BEA; and

• a price higher than BEA’s five-year high before our proposal.

“Oracle has no interest in a long, drawn-out process to acquire BEA. If the BEA board refuses to execute an acquisition agreement and refuses to let their shareholders vote, then our $17-per-share proposal to acquire BEA will expire at 5 p.m. PDT, on Sunday, Oct. 28.

Sincerely,

ORACLE CORPORATION

Interesting move, eh? More so given its impact on BEA’s share price today. Prior to Oracle’s offer, BEA was trading at $14.05 per share. After it, the stock hit $18.58. This morning, it’s trading at $17.98–down 3.28% on fears that Oracle will rescind its offer.

BEA Systems’ board formally rejected Oracle’s $17-per-share offer to acquire it last Friday, saying the company is trying to buy it on the cheap. “BEA is worth substantially more to Oracle, to others and importantly, to our shareholders than the price indicated in your letter,” William Klein, BEA’s vice-president of business planning and development, wrote to Oracle.

And by shareholders, Klein apparently meant billionaire investor Carl Icahn–who, though he’s been pushing for the company to sell itself, said in a statement that he agreed that, at $17 a share, the price was too low.

And perhaps it is. At this writing, BEA is trading well above $18, suggesting that Oracle’s offer of $17 a share is a tad anemic. And Oracle surely knows this as well as anyone. After all, this isn’t the first time it’s low-balled a potential acquisition. Oracle began its pursuit of PeopleSoft with a first stingy bid that it later sweetened. And like BEA, PeopleSoft spurned its advances, which in its case was not a winning strategy–because Oracle CEO Larry Ellison has the patience of the devil himself in these situations, especially when he can hurt a competitor’s business during takeover wrangling.

“This is very clearly thought out,” Ellison said after Oracle first besieged PeopleSoft. “I think we’re likely to be successful and we are very determined to see this through to the end. … With or without us, PeopleSoft can’t survive. They can’t compete in this business in the long term.”

Message to BEA: Like PeopleSoft, you will be assimilated. And, BEA’s Klein best be careful, lest he go out like former PeopleSoft CEO Craig Conway, of whom Ellison once said: “I think at one point, ‘Craigey’ thought I was going to shoot his dog, Bear. If Craigey and Bear were standing next to each other and I had one bullet, trust me, it wouldn’t be for the dog.”

BEA Systems’ board formally rejected Oracle’s $17-per-share offer to acquire it last Friday, saying the company is trying to buy it on the cheap. “BEA is worth substantially more to Oracle, to others and importantly, to our shareholders than the price indicated in your letter,” William Klein, BEA’s vice-president of business planning and development, wrote to Oracle.

And by shareholders, Klein apparently meant billionaire investor Carl Icahn–who, though he’s been pushing for the company to sell itself, said in a statement that he agreed that, at $17 a share, the price was too low.

And perhaps it is. At this writing, BEA is trading well above $18, suggesting that Oracle’s offer of $17 a share is a tad anemic. And Oracle surely knows this as well as anyone. After all, this isn’t the first time it’s low-balled a potential acquisition. Oracle began its pursuit of PeopleSoft with a first stingy bid that it later sweetened. And like BEA, PeopleSoft spurned its advances, which in its case was not a winning strategy–because Oracle CEO Larry Ellison has the patience of the devil himself in these situations, especially when he can hurt a competitor’s business during takeover wrangling.

“This is very clearly thought out,” Ellison said after Oracle first besieged PeopleSoft. “I think we’re likely to be successful and we are very determined to see this through to the end. … With or without us, PeopleSoft can’t survive. They can’t compete in this business in the long term.”

Message to BEA: Like PeopleSoft, you will be assimilated. And, BEA’s Klein best be careful, lest he go out like former PeopleSoft CEO Craig Conway, of whom Ellison once said: “I think at one point, ‘Craigey’ thought I was going to shoot his dog, Bear. If Craigey and Bear were standing next to each other and I had one bullet, trust me, it wouldn’t be for the dog.”