Dear Yahoo: You’re Fired
Michael Arrington
141 comments »
Update: Yahoo Responds
As expected, Carl Icahn presented an alternate slate of directors for the upcoming Yahoo shareholder meeting. The letter to Yahoo Chairman Roy Bostock says it all:
Carl C. Icahn
ICAHN CAPITAL LP
767 Fifth Avenue, 47th Floor
New York, NY 10153
May 15, 2008
Roy Bostock
Chairman
Yahoo! Inc.
701 First Avenue
Sunnyvale, CA 94089
Dear Mr. Bostock:
It is clear to me that the board of directors of Yahoo has acted irrationally and lost the faith of shareholders and Microsoft. It is quite obvious that Microsoft’s bid of $33 per share is a superior alternative to Yahoo’s prospects on a standalone basis. I am perplexed by the board’s actions. It is irresponsible to hide behind management’s more than overly optimistic financial forecasts. It is unconscionable that you have not allowed your shareholders to choose to accept an offer that represented a 72% premium over Yahoo’s closing price of $19.18 on the day before the initial Microsoft offer. I and many of your shareholders strongly believe that a combination between Yahoo and Microsoft would form a dynamic company and more importantly would be a force strong enough to compete with Google on the Internet.
During the past week, a number of shareholders have asked me to lead a proxy fight to attempt to remove the current board and to establish a new board which would attempt to negotiate a successful merger with Microsoft, something that in my opinion the current board has completely botched. I believe that a combination between Microsoft and Yahoo is by far the most sensible path for both companies. I have therefore taken the following actions: (1) during the last 10 days, I have purchased approximately 59 million shares and share-equivalents of Yahoo; (2) I have formed a 10-person slate which will stand for election against the current board; and (3) I have sought antitrust clearance from the Federal Trade Commission to acquire up to approximately $2.5 billion worth of Yahoo stock. The biographies of the members of our slate are attached to this letter. A more formal notification is being delivered today to Yahoo under separate cover.
While it is my understanding that you do not intend to enter into any transaction that would impede a Microsoft-Yahoo merger, I am concerned that in several recent press releases you stated that you intend to pursue certain “strategic alternatives”. I therefore hope and trust that if there is any question that these “strategic alternatives” might in any way impede a future Microsoft merger you will at the very least allow shareholders to opine on them before embarking on such a transaction.
I sincerely hope you heed the wishes of your shareholders and move expeditiously to negotiate a merger with Microsoft, thereby making a proxy fight unnecessary.
Sincerely yours,
CARL C. ICAHN
SLATE BIOGRAPHIES
Lucian A. Bebchuk
Lucian Bebchuk is the William J. Friedman and Alicia Townsend Friedman Professor of Law, Economics, and Finance and Director of the Program on Corporate Governance at Harvard Law School. Bebchuk is also a Research Associate of the National Bureau of Economic Research and Inaugural Fellow of the European Corporate Governance Network. Trained in both law and economics, Bebchuk holds an LL.M. and S.J.D. from Harvard Law School and an M.A. and Ph.D in Economics from the Harvard Economics Department. He joined the Harvard Law School faculty in 1986 as an assistant professor, becoming a full professor in 1988, and the Friedman Professor of Law, Economics and Finance in 1998. Bebchuk has written extensively on corporate governance, corporate control, and corporate transactions. He has published more than seventy research articles in academic journals in law, economics, and finance. Upon electing him to membership in 2000, the American Academy of Arts and Sciences cited him as “[o]ne of the nation’s leading scholars of law and economics,” who “has made major contribution to the study of corporate control, governance, and insolvency.” He is the 2007-2008 President of the American Law and Economics Association, and a former chair of the Business Association Section of the American Association of Law Teachers. Bebchuk’s recent writings include Pay without Performance: the Unfulfilled Promise of Executive Compensation (Harvard University Press, 2004, co-authored with Jesse Fried), “The Case for Increasing Shareholder Power” (Harvard Law Review, 2005), “The Costs of Entrenched Boards” (Journal of Financial Economics, 2005, co-authored with Alma Cohen), and “The Myth of the Shareholder Franchise” (Virginia Law Review, 2007). Bebchuk has been a frequent contributor to policy making and public discourse in the corporate governance area. He has appeared before the Senate Finance Committee, the House Committee of Financial Services, and the SEC. He has published many op-ed pieces, including in the Wall Street Journal, the New York Times, and the Financial Times. He was included in the list of “100 most influential people in finance” of Treasury & Risk Management and the list of “100 most influential players in corporate governance” of Directorship magazine.
Frank J. Biondi, Jr.
Since March 1999, Mr. Biondi has served as Senior Managing Director of WaterView Advisors LLC, an investment advisor organization. From April 1996 to November 1998, Mr. Biondi served as Chairman and Chief Executive Officer of Universal Studios, Inc. From July 1987 to January 1996, Mr. Biondi served as President and Chief Executive Officer of Viacom, Inc. Mr. Biondi is a director of Amgen Inc., Cablevision Systems Corp., Hasbro, Inc., The Bank of New York Mellon Corporation and Seagate Technology. Mr. Biondi is a graduate of Princeton University and earned a Masters of Business Administration from Harvard University.
John H. Chapple
John Chapple is President of Hawkeye Investments LLC, a privately-owned equity firm investing primarily in telecommunications and real estate ventures frequently working in conjunction with Rally Capital LLC. Prior to forming Hawkeye, John Chapple worked to organize Nextel Partners, a provider of digital wireless services in mid-size and smaller markets throughout the U.S. He became the President, Chief Executive Officer and Chairman of the Board of Nextel Partners and its subsidiaries in August of 1998. Nextel Partners went public in February 2000 and was traded on the NASDAQ Exchange. In June 2006, the company was purchased by Sprint Communications. From 1995 to 1997, Mr. Chapple was the President and Chief Operating Officer for Orca Bay Sports and Entertainment in Vancouver, B.C. During Mr. Chapple’s tenure, Orca Bay owned and operated Vancouver’s National Basketball Association and National Hockey League sports franchises in addition to the General Motors Place sports arena and retail interests. From 1988 to 1995, he served as Executive Vice President of Operations for McCaw Cellular Communications and subsequently AT&T Wireless Services following the merger of those companies. From 1978 to 1983, he served on the senior management team of Rogers Cablesystems before moving to American Cablesystems as Senior Vice President of Operations from 1983 to 1988. Mr. Chapple, a graduate of Syracuse University and Harvard University’s Advanced Management Program, has 26 years of experience in the cable television and wireless communications industries. Mr. Chapple is the past Chairman of Cellular One Group and CTIA-The Wireless Association, past Vice-Chairman of the Cellular Telecommunications Industry Association and has been on the Board of Governors of the NHL and NBA. Mr. Chapple serves on the Syracuse University Board of Trustees currently as Chairman and the Advisory Board for the Maxwell School of Syracuse University. He is also on the Board of Directors of Cbeyond, Inc., a publicly traded Atlanta-based integrated service telephony company; Seamobile Enterprises, a privately held company providing integrated wireless services at sea; Telesphere, a privately held VOIP (voice over internet protocol) company based in Phoenix, Arizona; and on the advisory boards of Diamond Castle Holdings, LLC, a private equity firm based in New York City and the Daniel J. Evans School of Public Affairs at University of Washington.
Mark Cuban
Since early 2000, Mr. Cuban has been the majority and controlling owner of the National Basketball Association franchise, the Dallas Mavericks. In 2001, Mr. Cuban co-founded HDNet, an all high-definition television network on DIRECTV that broadcasts high-definition sports, movies and other entertainment. Prior to his purchase of the Dallas Mavericks, Mr. Cuban co- founded Broadcast.com in 1995 and served as its Chairman of the Board until it was sold to Yahoo! in July of 1999. Before Broadcast.com, Mr. Cuban co-founded MicroSolutions, a national systems integrator, in 1983, which was later sold to CompuServe Corporation in 1990. Mr. Cuban is an active investor in cutting- edge technologies and various industries, including the entertainment industry.
Adam Dell
Since January 2000, Mr. Dell has served as the Managing General Partner of Impact Venture Partners, a venture capital firm focused on information technology investments. He also serves as Managing Director at Steelpoint Capital Partners, a private equity firm with offices in New York and California. From October 1998 to January 2000, Mr. Dell was a Senior Associate and subsequently a Partner with Crosspoint Venture Partners in Northern California. From July 1997 to August 1998, he was a Senior Associate with Enterprise Partners in Southern California. From January 1996 to June 1997 Mr. Dell was associated with the law firm of Winstead Sechrest & Minick, in Austin, Texas, where he practiced corporate law. Mr. Dell’s investments include: Buzzsaw (which was acquired by Autodesk), HotJobs (which was acquired by Yahoo!) and Connectify (which was acquired by Kana Software). Mr. Dell has been a director of XO Holdings, Inc., a telecommunications services provider, since February 2006, and of its predecessor from January 2003 to February 2006. In addition, Mr. Dell currently serves on the boards of directors of the Santa Fe Institute, MessageOne and OpenTable. He also teaches a course at the Columbia Business School on business, technology and innovation and is a contributing columnist to the technology publication, Business 2.0. Mr. Dell received a J.D. from University of Texas and a B.A. from Tulane University.
Carl C. Icahn
Mr. Icahn has served as chairman of the board and a director of Starfire Holding Corporation, a privately-held holding company, and chairman of the board and a director of various subsidiaries of Starfire, since 1984. Since August 2007, through his position as Chief Executive Officer of Icahn Capital LP, a wholly owned subsidiary of Icahn Enterprises L.P., and certain related entities, Mr. Icahn’s principal occupation is managing private investment funds, including Icahn Partners LP, Icahn Partners Master Fund LP, Icahn Partners Master Fund II L.P. and Icahn Partners Master Fund III L.P. Prior to August 2007, Mr. Icahn conducted this occupation through his entities CCI Onshore Corp. and CCI Offshore Corp since September 2004. Since November 1990, Mr. Icahn has been chairman of the board of Icahn Enterprises G.P. Inc., the general partner of Icahn Enterprises L.P. Icahn Enterprises L.P. is a diversified holding company engaged in a variety of businesses, including investment management, metals, real estate and home fashion. Mr. Icahn was chairman of the board and president of Icahn & Co., Inc., a registered broker- dealer and a member of the National Association of Securities Dealers, from 1968 to 2005. Mr. Icahn has served as chairman of the board and as a director of American Railcar Industries, Inc., a company that is primarily engaged in the business of manufacturing covered hopper and tank railcars, since 1994. From October 1998 through May 2004, Mr. Icahn was the president and a director of Stratosphere Corporation, the owner and operator of the Stratosphere Hotel and Casino in Las Vegas, which, until February 2008, was a subsidiary of Icahn Enterprises L.P. From September 2000 to February 2007, Mr. Icahn served as the chairman of the board of GB Holdings, Inc., which owned an interest in Atlantic Coast Holdings, Inc., the owner and operator of The Sands casino in Atlantic City until November 2006. Mr. Icahn has been chairman of the board and a director of XO Holdings, Inc., a telecommunications services provider, since February 2006, and of its predecessor from January 2003 to February 2006. Mr. Icahn has served as a Director of Cadus Corporation, a company engaged in the ownership and licensing of yeast-based drug discovery technologies since July 1993. In May 2005, Mr. Icahn became a director of Blockbuster Inc., a provider of in-home movie rental and game entertainment. In October 2005, Mr. Icahn became a director of WestPoint International, Inc., a manufacturer of bed and bath home fashion products. In September 2006, Mr. Icahn became a director of ImClone Systems Incorporated, a biopharmaceutical company, and since October 2006 has been the chairman of the board of ImClone. In August 2007, Mr. Icahn became a director of WCI Communities, Inc., a homebuilding company, and since September 2007 has been the chairman of the board of WCI. In December 2007, Mr. Icahn became a director of Federal-Mogul Corporation, a supplier of automotive products, and since January 2008 has been the chairman of the board of Federal-Mogul. In April 2008, Mr. Icahn became a director of Motricity, Inc., a privately-held company that provides mobile content services and solutions. Mr. Icahn received his B.A. from Princeton University.
Keith A. Meister
Since March 2006, Keith Meister has served as Principal Executive Officer and Vice Chairman of the Board of Icahn Enterprises G.P. Inc., the general partner of Icahn Enterprises L.P., a diversified holding company engaged in a variety of businesses, including investment management, metals, real estate and home fashion. Since November 2004, Mr. Meister has been a Managing Director of Icahn Capital LP, the entity through which Carl C. Icahn manages third party private investment funds. Since June 2002, Mr. Meister has served as senior investment analyst of High River Limited Partnership, an entity primarily engaged in the business of holding and investing in securities. Mr. Meister also serves on the boards of directors of the following companies: XO Holdings, Inc., a telecommunications company; WCI Communities, Inc., a homebuilding company; Federal-Mogul Corporation, a supplier of automotive products; and Motorola, Inc., a mobile communications company. With respect to each company mentioned above, Carl C. Icahn, directly or indirectly, either (i) controls such company or (ii) has an interest in such company through the ownership of securities. Mr. Meister received an A.B. in government, cum laude, from Harvard College in 1995.
Edward H. Meyer
Mr. Meyer serves as Chairman, Chief Executive Officer and Chief Investment Officer of Ocean Road Advisors, Inc., an investment management company. From 1970 to 2006, he served as Chairman, Chief Executive Officer and President of Grey Global Group, Inc., a multi-billion dollar global advertising and marketing agency. Mr. Meyer serves as a Director of Harman International Industries, Inc., Ethan Allen Interiors, Inc., National CineMedia, Inc. and NRDC Acquisition Corp. Mr. Meyer holds a B.A. in Economics from Cornell University.
Brian S. Posner
Brian S. Posner is a private investor. From 2005 through March 2008, he served as Chief Executive Officer and co-Chief Investment Officer of ClearBridge Advisors LLC (and its predecessor company, CAM North America), an asset management company based in New York with approximately $90 billion in assets and a wholly owned subsidiary of Legg Mason Inc. Prior to ClearBridge Advisors, he was a co-Founder and the Managing Partner of Hygrove Partners LLC, a hedge fund company that was formed in 2000. Prior to ClearBridge Advisors and Hygrove Partners, he served as a Portfolio Manager and an Analyst, first at Fidelity Investments from 1987 to 1996 and then at Warburg Pincus Asset Management/Credit Suisse Asset Management from 1997 to 1999. At Warburg Pincus Asset Management/Credit Suisse Asset Management he was a Managing Director and served as the Senior Investment Manager of the Value Equity Group, co-Portfolio Manager of the Warburg Pincus Growth & Income Fund, and Portfolio Manager of the Warburg Pincus Institutional Value Fund and the Warburg Pincus Trust, Growth and Income Fund. Prior to the acquisition of Warburg Pincus Asset Management (”WPAM”) by Credit Suisse Asset Management in July 1999, he was co-Chief Investment Officer, Director of Research, Chairman of the Global Asset Allocation Committee, and a member of the Executive Operating Committee at WPAM. At Fidelity Investments, he was the Portfolio Manager of the Fidelity Equity Income II Fund from 1992 to 1996 and the Fidelity Value Fund from 1990 to 1992. He also managed the Select Life Insurance, Select Property Casualty Insurance and Select Energy Portfolios. From 1987 to 1990, he was an Oil, Insurance, and Financial Services Analyst. From August 2000 to April 2003 he served on the Board of Directors for Sotheby’s Holdings, Inc. He currently a member of the Board of Trustees at Northwestern University and the Board of Visitors for the Weinberg College of Arts and Sciences at Northwestern University. Mr. Posner received his undergraduate degree in history from Northwestern University in 1983 and his M.B.A. in finance from the University of Chicago Graduate School of Business in 1987.
Robert K. Shaye
Robert Shaye is Co-Chairman and Co-CEO of New Line Cinema. As the Founder of New Line Cinema and a filmmaker himself, Robert Shaye has spent more than 40 years developing and distributing films that reflect a wide array of cultural movements, creating new paradigms for the motion picture business, and most importantly, entertaining millions of moviegoers. Since he founded New Line in 1967, Shaye has guided the company’s growth from a privately-held art film distributor to one of the entertainment industry’s leading independent studios and a veritable box office force. He has been involved in such films as The Lord of the Rings trilogy, Rush Hour, Austin Powers and Seven. A University of Michigan graduate with a degree in business administration and a J.D. degree from Columbia University Law School, Shaye is also a Fulbright Scholar, member of the New York State Bar, and serves on the Board of Trustees of the Motion Picture Pioneers, and the American Film Institute.
Yah !
Its not over yet !
Ah, this is getting fun now!
No surprise. Not accepting Microsoft’s offer (and the way they did it) was a terrible job. This is not about liking MS or not, it’s a business decision over other peoples money. Now if you’re hired to take care of one’s money and you’re doing a terrible job you’ve got to expect to get fired (When did you switch your broker the last time?).
The interesting thing will now be what happens to Yahoo next.
Peter
do you follow me @ http://twitter.com/peterurban
A board full of academics and investment bankers, oh and Mark Cuban.
Well that certainly fills me with confidence.
Yahoo as you know it is over. Best case, Yahoo runs to Microsoft to save it. Worst case, Icahn takes it over, and if he can’t do a deal with MS, will break up the company and sell the pieces to the highest bidders. On the bright side, between this and CBS/CNET, the industry has now grown up, even if the people within it haven’t.
Here comes the judge.
Harry “making no sense today” Wang
I wonder how Yahoo got to this point.. It’s clearly a management problem, I think its over for Yahoo, its only a matter of time the company fades away like Netscape. I had faith in Yahoo, till some bunch started a company called “Google”.. got everybody running around acquiring stuff.
What a win for MS - they will get a prepackaged board at a lower price - I love capitalism
About time–Yahoo’s management is horrible and they are finally about to be displaced.
Don’t you think it’s rude?
Still I believe that there is a chance for a deal to happen. We can’t rule out Ballmer yet.
Let’s see if I can sum up the entire soap opera with quick, witty phrases:
MS: Hey Yahoo, how about you guys join forces with us?
Yahoo: Never!
Google: Hey Yahoo, what if we greased your wheels a little? Just enough to get those pesky shareholders off your back?
Yahoo: Great idea!
MS: Ok, we’ll kick in a little more. How about now?
Yahoo: No way!
MS: Ok, thanks for nothing.
Yahoo: OK Google, about that ad deal…..
Google: Ummm, yeahh, we’ll get back to you on that.
Icahn: Hey Yahoo, big shareholder here and I AM PISSED. We need to fix this deal with MS, and fast. And I’m not ASKING. As Jack said in A Few Good Men, “You f****d with the wrong marine!”
Anything I’m missing here?
So is his plan to replace the board by buying a large portion of the company, and then sell it to Microsoft? Why doesn’t Microsoft just work with Yahoo and buy it now? I think they realize their time is running short and will cooperate a bit more now.
That’s an awesome letter! Oh to be able to write such a letter.
How was this letter obtained?
But doesn’t it almost seem out of context?
Him doing this?
He has had no interest in this until yesterday. This company that has been in business for 15 years or so.
This looks like a desperate attempt to stay relevant in the business IT sector to me. I don’t see substance behind this.
It’s as if somebody bought 4% of Microsoft, then told the company that Bill Gates was the worst business person ever and to spit on his picture in the halls of Redmond, because since yesterday, he has asserted a higher importance with his 4% buy in.
- does not compute -
I don’t think the rest of the share holders will either. People are smarter than that.
Nice irony to see Mark Cuban chomping the hand that made him a billionaire.
@Chris 14 - “This looks like a desperate attempt to stay relevant in the business IT sector to me.”
Wtf?
This is about money and nothing else. All parties (except maybe Yahoo) included.
Wow, it looks like they mean business. Are any other shareholders going to put forward an alternative board before the deadline?
How very nice, if those who founded a company (and have their heart and blood in it) decide to do something the rich boys don’t like, they’ll simply be fired and the shareholders will elect new presidents who do what they want to be done.
And what they want is profit. Nothing else but profit, no morale, no ideals, no principles but money.
Let’s see how this ramps up, I bet not all of the bright heads behind Yahoo! want to work for Microsoft…
Pretty straight forward…
http://twitter.com/jnegretti
can’t see anyone there with a demonstrable knowledge of digital media or technology. big boys in big suits aren’t enough to beat Google on their own.
I am sad about it .. I agree with Pascal …but Its kinda done for Yahoo. and irony of life Mark Cuban is on the board ..this couldn’t have more cruel to Yang.
It’s sad to see this. Icahn is being an opportunistic jack-ass.
I would support Yang & Co in this if I honestly thought he could do it. Yahoo has great ideas but I don’t see delivery, I don’t see traction.
One way out is that Yahoo & Microsoft work together on Search but remain separate entities. Is that going to happen? No. I would like to see that happen though.
Microsoft is right - the only way either of them will succeed is with scale. Microsoft knows they don’t have it. Yahoo is delusional and thinks they can get it.
This letter was clearly formulated to get other share holders to rally behind any possible other future mergers. Not an appeal to the yahoo board. Microsoft and Yahoo together will not compete with Google they will just gain a little more market share. Innovate some new search functionality give people better search results they will come. See http://en.wikipedia.org/wiki/Semantic_Web .
Carl: This is a blatant attach to peruse your own selfish needs. GO AWAY!!!
By the way your board is just redonkulus (There is not better word)
A fool and his money are soon parted
It’s over for Yahoo and Hilary.
Best of luck to all. Y! is a great company and will continue to impress the world!
Or so it seems..
“This is about money and nothing else. All parties (except maybe Yahoo) included.”
Ballmer walked away. It’s over.
There is no more Microhoo! Inc.
This is only hurting Yahoo’s stock holders more. The more they fight over this publicly the less the company is going to be worth. Guaranteed.
Is there a Cliff’s Notes version?
“This is about money and nothing else. All parties (except maybe Yahoo) included.”
Ba11mer walked away. It’s over.
There is no more Microhoo! Inc.
This is only hurting Yahoo’s stock holders more. The more they fight over this publicly the less the company is going to be worth. Guaranteed.
this guy needs to go fuck himself. Yahoo! brings happiness into peoples lives and actually makes money doing it! Now this scumbag wants to destroy the company…..for what?
Adam “little brother” Dell?
Turn out the lights, the parties over.
Dirty move.
I know I might be in the minority here, but I really feel like Yahoo made the right move by turning down the Microsoft offer.
Yang cares about the future of Yahoo. Icahn doesn’t.
Remember, Yang turned down a huge personal fortune by saying “no” to Microsoft. Yang made his decision out of conviction. Icahn made his out of greed. I don’t respect people like that.
This is a good example for all the companies that want to go VC and eventually trade publicly. If you go that route you don’t own the company anymore, your employees don’t and your customers don’t. It’s the people that own the shares that own it, and management merely represents those people and is supposed to act in their best interest. In this sense Yahoo! wasn’t ‘lost’ recently but when the shares were distributed the way they are. If i.e. the founders would have been able to keep a higher percentage they’d have more say in what’s going to happen to the company… Common sense but apparently not clear to everybody.
Lesson learned: If you want to run a company your way, you’ve got to own it. Think about it before you go for (or work for) your next startup.
Peter
do you follow me @ http://twitter.com/peterurban
Yawn…
This is what you get when you jump in bed with VC’s and you go public.
When you do that you no longer have control over any part of the venture that you put blood and sweat into.
Yang should just sell it and go do something else, because once Icahn gets his dirty hands on it, then its just going to be broken up and sold to the highest bidder.
What Arrington still yet does not realize, is that a Microsoft/Yahoo merger will never work. Lots of things stand in the way:
1. Microsoft will not leave the powerhouse that is Yahoo display ads alone, they’ll meddle with it and drive it in the ground (see MSN).
2. The tech cultures are 180 degrees opposing. There is no common DNA, i repeat, there is no common DNA. This is not like a HP+Compaq merger. You really think a tech guy who spent the last 5 years building yahoo answers is gonna stick around to see his baby go down the tubes?
3. Both companies have crappy ad network systems. Yes they do. Because no matter what other networks and techs they bought before, its all piecemeal. Nothing beats Adwords and Adsense for being totally home grown and homogeneous.
4. Microsoft will never, ever, never grow any other part of Yahoo. It will be merely stay as it is and slowly decline.
So this is all about the cash at the moment. Nothing else. No thought about the future of the company and where it could be.
Techcrunch salivates because it brings pageviews, and its kind of sexy to take about mergers and acquisitions and funding and angel investing and all of that.
But take note that most of the companies that get covered here, either go into the dead pool, or go into the forgotten corner of the basement of the companies that bought them in the first place.
I still read techcrunch though
@33,
That’s easier said than done. You need a certain threshold of cash flow in order to compete, and banks don’t want to secure startup companies with minimal assets. Otherwise your company will go no where. So it’s a bad necessity.
I’ll leave that for another blog post on VC though.
Good Ctrl C, Ctrl V skills here Mike
Good work TC. Great reporting. Excellent work - keep it up Michael.
I’ve been betting since early March that Yahoo would succumb to Microsoft. I think Microsoft gave them enough time and was unnecessarily generous by raising their final bid to Yahoo. It’s sad to see ego and pride overrule sound judgment and managment. I’m afraid that at this point, Yahoo really has no where left to go.
36 continued.
Go to Wamu and offer your rented office suite and ping pong table as security for a loan to create website and online stuff. Tell me if you get a positive response.
It doesn’t matter what’s in a business plan to a bank.
I’m afraid, Mr. Urban, that you are correct. As a Yahoo customer, however, I am concerned about the quality of their services should they fall under another company’s “master plan.” So you think we can expect the same level of customer attention and service from Microsoft? Can anything in the negotiated sale be made to guarantee it?
Dear Jerry,
Like it or not, you are dealing with The Big Boys now. Go start another company and don’t take it public.
Sincerely,
Everyone
comment #10, ur amazing! ROFL!!
Incredible, how stupid these people were.
Yahoo is a steal at $33. If they sold their Chinese (Alibaba) and Japanese division, they’d already make a lot of money, their remaining business is big, too. No wonder Microsoft wants to buy Yahoo!
Yahoo is dead.
Best topical “lol” I’ve seen: http://www.lanxon.co.uk/index......oo-merger/
time to watch yahoo stock lol
“I bet not all of the bright heads behind Yahoo! want to work for Microsoft…”
Newsflash #18, all the bright heads left Yahoo a few years back.
Mike, Good Stuff! I thought you were getting Slow and took your Eye off the Ball.
I happen to have it on good authority that all of the directors on Mr. Ichan’s slate are Android Robots powered by Hydrogen Fuel cells, designed in Japan, by a company that Mr. ichan is a majority shareholder in.
so, they will obviously vote the way Ichan wants then to vote, being Robots.
I wonder if the Yahoo share-holders are thinking long term or short term financial gain.
I think we all know what happens when Microsoft buys another company… short term boost for the share-holders if its public or founders if its private, but after that the acquired company kind of wilts and dies.
I think it’s a bid for short term profits. I don’t see how Yahoo’s value will rise after being acquired by Microsoft. Now, Microsoft’s profits will probably spike, as they take anything of value that Yahoo produces and uses it for themselves but…
Everyone who bashes Yahoo forgets that Yahoo is still an impression powerhouse. They have one fundamental flaw and thats their advertising system. Yahoo just need get rid of Jerry Yang and hire a CEO who will focus solely on monetization strategy and stop building these random fly-by-night web properties. If Yahoo created the next-gen of AdWords, everyone would be singing a different tune.
Wonder what Icahn thinks of Mark’s idea: http://www.emaildashboard.com/.....yahoo.html
@dhimes (post #40)
The easiest way to answer your question is to look at the potential buyer’s products and services. If you’re not happy with them it’s very likely that you won’t be happy with the post merger Yahoo!. I am afraid whoever sells Yahoo! doesn’t want to make it more complicated for the new buyer then necessary and will certainly not try to dictate how business is done post sale. It’s all about the money (another definition for business).
Again, if you want a comfy place to work at, where customers are happy and the second most important focus after employees, where true innovation drives business…. DON’T GO PUBLIC (as is don’t put your baby into people’s hands that have no other interest then quatrupling their stock).
But you also have to accept that you probably don’t get the big lottery ticket yourself. Instead you’ll have to put up with a solid paycheck - if you’re successful that is.
Peter
do you follow me @ http://twitter.com/peterurban
YAHOO SELL YOUR ASS TO MICROSOFT! And yeah Comment # 10 is awesome….lol
Wow, I don’t think I’d want to be Roy Bostock right now. Can you imagine receiving a letter like that? That’s one of the most laser-guided, weaponized letters I’ve ever seen. It’s art in itself, without respect to the MicroHoo fiasco.
Imagine Roy on the Enterprise yelling iCAHN!
you guys need to watch/re-watch the “Icahn Lift” piece on 60 minutes. Guy is a machine.
http://www.cbsnews.com/section.....arch_video
mark cuban is a BIG PLUS for yahoo. he has a big mouth but more often than not what comes out of it makes sense. and how many people do you know have become succesful on the web, with a film studio (cuban’s films make money in an era of big studio pain), and a sports team? he knows how to run a business. once lucky, three times succesful takes skill. mark cuban is an asset.
On another note, does anyone here remember Apple prior to Steve’s comeback - very much on the verge of collapsing, and look at it now. A good example what a difference a little bit of fresh spirit at the top can make. Who would have thought they could go where they are today?
And tis is certainly not just true for hood old hardware ’boutiques’.
Yahoo! you have three options:
1) Sell, cash in and stop whining.
2) Clone Steve. Stand for something (how about the most innovative web interface company) so that the public can recognize you. Fix your business (add engine) problems and finally get innovative again(i.e. check nexopia.com’s 2.0 release if you want to purchase the better facebook for peanuts).
3) Continue the slow public implosion while feeding the rise of Michael Arrington’s TC network with more ridiculous action (or lack thereof).
I am happy either way.
Peter
do you follow me @ http://twitter.com/peterurban
That is great news. More should come out about the mismanagement at Yahoo. I have been fighting incompetence at Yahoo all week.
While Yahoo chose to list one of our sites as a spammer in the new SearchScan, it took my blog to get McAfee to retest. Yahoo had told me that we had to get McAfee to retest. After McAfee removed the red flag spammer rating from the site, Yahoo said it would take at least a month for it to remove the red warning and restart our Paid Inclusion campaign.
After several days of pressure from Outrider, Yahoo decided to reindex our site. The red warning is starting to come down (it will take days to complete).
If you get picked up as a spammer by Yahoo, I wish you luck at getting fast resolution. Read the letters from Yahoo on my blog. You’ll see that it’s hopeless in dealing with Yahoo.
Oh, and our YSM campaign are still turned off. No one there will return my calls.
http://www.revenews.com/davidl.....ays-yahoo/
An incredible slate of candidates! With the possible exception of Mark Cuban, there’s hardly anyone with any operational business experience. They’re all there to help Carl Icahn flip Yahoo! to Microsoft (or another potential buyer). I wonder how many millions of dollars they will pay themselves as a reward for doing that, and how many additional millions of Yahoo’s current cash reserves will be spent in the process. These financial guys will also find a way to give themselves options for a special class of Yahoo stock that will put them at the head of the line in front of Yahoo’s common shareholders.
Mark Cuban on the board… how cool is that? It will be interesting to see if Cuban starts unleashing a torrent of attacks on Yahoo’s management team.
This week David Faber of CNBC described Yahoo’s managers as a bunch of “morons” who have no idea what they’re doing. My bet is that Cuban will top that.
yes, yahoo ! fired!!!
If Microsoft wants a $42 billion dollar empty shell ( after all the employees quit and the massive user revolt planned ) they are welcome to it. $42 billion for an office building in Sunnyvale and nothing else? That’s gotta be some kinda record!
Plenty of smart folks will work for Microhoo.
Carl Icahn just became my hero.
“Worst case, Icahn takes it over, and if he can’t do a deal with MS, will break up the company and sell the pieces to the highest bidders.”
At least then Zimbra might still have a future, except that it would almost certainly go to Oracle.
@Peter 58 - “On another note, does anyone here remember Apple prior to Steve’s comeback - very much on the verge of collapsing, and look at it now. A good example what a difference a little bit of fresh spirit at the top can make.”
Little bit of fresh spirit? That would also include:
- 5 year ramp-up time for a new CEO that has unfettered control within the organization, carries unimpeachable credibility within the ranks as the undisputed leader and leaves little doubt who is in charge.
- New product lines that achieve huge followings with per-use transactions behind them.
- Revamped, existing product lines that are premium options (and priced) over their commodity counterparts.
- A chief competitor that’s working to *ensure* your existence due to anti-trust concerns, as well as seeing their own competing products dramatically decline in appeal.
I think an Apple-esque resurgence of Yahoo requires a whole lot of things falling into place for them.
This was the only possible outcome.
I said a couple of weeks ago, sooner or later Yahoo!@ will be Microsoft’s.
A hostile takeover was out of the question but once you make an unsolicited bid you have to be prepared to buy. Ballmer walking away from the deal was just setting the stage for this.
My original post (too long to embed here): http://thebigdeal.wordpress.co.....-facebook/
Great initiative, this is one merger that makes sense!
Never mind that the merger makes no sense and would be complete disaster for both companies in the long run as well as their sharholders and consumers.
the fun begins anew - i bet every single one of msft and yhoo’s competitors are smiling
This is a lot of work to get the “interim” CEO Yang to give up his post and start letting someone with real experience and a rational thought process start running the company. Two ways to get more value out of Yahoo - 1) sell to M$, 2) Fire all the top managers (and the BOD, since they didn’t already act on this) and get some real leadership running things. Just look at HP’s turnaround in the last 2 years. Yahoo still has good traffic and brand. All they need is a competent leadership team (or barring that, a quick sale!). Its a shame the current leadership is so self-absorbed they cannot see their flaws…
Carl Icahn needs a hobby. He should become a tag-team wrestler with Kirk Kerkorian — I’d pay good money to see them take on the British Bulldogs.
If Icahn gets the wheel - I would predict that MSFT would lower its bid price due to the pride issue of not wanting to flip Icahn billions for a weeks work - especially since the Y gang would then practice blackened earth policy and MSFT prefers a seduction over a violation - its just how devils work - they want not thee body, but thee soul - and there are financial reasons for wanting it willingly as well. Meaning that is Icahn would be left controlling YHOO with MSFT not coming at the price that it thought it would.
Which would lead to a whole new and somewhat desperate playing field. But the weather predicts that he will retreat or allow himself to be pushed back before this point occurs.
On a related note - word from the barracks at yahoo that the employees are yawning and laughing with glee with hopes of rising stock prices.
please stop spamming this. Link it to your name if you want to self promote.
Save the in-comment links for stuff related to the conversation.
That is all.
I see a contradiction in Icahn’s stated motivations. On one hand he blasts Yahoo’s board for turning down a deal with an at-the-time significant upside. On the other hand, he states his belief that Yahoo has potential, and CAN compete with Google - another significant upside.
I’m hearing this: the best way to provide value to your shareholders is to do the deal with Microsoft, and let the combined company be the competitor to Google.
The questions I have are: Can a mega-merger like this create the Google competitor Icahn describes? Possibly, but wow - that’s some integration. Can Yahoo be the competitor to Google without Microsoft? Possibly, but that is some shift in focus. Does Icahn really think Yahoo can turn into a Google competitor? I don’t think so (and I don’t think he cares), or he would buy the stocks and hold them.
interesting how the letter is being addressed to Roy Bostock and not Jerry Yang.
I could be way off base here since I am not familiar with their finances but I personally think an Amazon/Yahoo merger makes WAY more sense. Both have a similar culture in terms of their origin in the nascent and heady days of Internet startups. Both tend to favor open *nix technologies, both provide free services. Combine Amazon cloud-based initiatives with Yahoo!s ad engine and web development services and I think you have a mighty potent combo. So am I way off? I could see Amazon certainly not having the liquidity MS deep pockets to pull it off but couldn’t they still do a cash and stock offer?
@80
NO.
Yahoo to Icahn: No, You’re Fired.
http://fakemikea.wordpress.com.....ure-fired/
Let’s see how well Jerry Yang will take this. He needs to get his Taiwanese blood pumping with some Chinese connections going on.
I cant help but notice that Icahns street adress is the same as Apples Cube store on Manhattan. Conspiracy anyone?
This sad story shows why it going public without having a controlling interest is a bad f-ing idea if you are an owner that loves your company.
Icahn goes on a bull$hit spreading spree in that letter, talking about shareholder value but barely does he mention the customers. See, when a company has its founders behind it with controlling stakes, there is more care placed on what the customers want in terms of service and product then when it is made public without controlling interest and the whim of the faceless “investor” guides silently the business decisions of the company. This is when a company with a purpose and a mission, a heart… turns into a corporation without a soul. Yahoo passed that point when any single individual lost controlling interest and has been subject to the blow of the public breeze as determined by its “investors” (Icahn among them) who, lets face it…don’t give a flying F ck about the customers, all they want is a better share price in each succeeding quarter or a higher price than when they bought it. Customer value doesn’t factor into the equation as much as they’d lie and say it does. All that matters to the customer is “make stock rise so that I can sell at the highest price.” So, I recognize the inevitability of Yahoo’s position and now that vultures like Icahn have surrounded the carcass to see if they can get the choice bites of meat it is only a matter of time. I just wish he’d come out and say the truth, don’t lie and go on a disingenuous shpiel about a strong and vibrant Yahoo under Microsoft. Everyone knows that the minute Microsoft gets Yahoo it will be “Borged” (you know “assimilation, resistance is futile!”) the choice IP will be sucked in and rebranded for Microsoft products, users will be pushed over to the Microsoft labeled options and Yahoo’s site and search will slowly be absorbed as well, the idea of a distinct and vibrant Yahoo under Microsoft ownership is absolutely laughable…yet here is Icahn running his shell game.
I truly hope that Yang and co. can pull out the technological advances they are hoping to this year and from the threat of imminent “assimilation” have the fires of innovation stoked so that maybe they can stay alone and vibrant, just so that yahoo users (like myself) can be assured that they will get the same service they always have from the company without fear of one day receiving a dreaded “your account is moving to Microsoft!” letter.
Dsl
Lets face it: $19 price is a history. Any discussion related to that price is completely useless.
Yahoo is not going back to $19 price again. Instead it is steady at ~$25. Today, it is at $27.75. Considering this, I do not think that $33 was a good price for Yahoo.
Microsoft should have put some more dough on the table because they have no alternate strategy to fight against Google.
@19 (Pascal) said “How very nice, if those who founded a company (and have their heart and blood in it) decide to do something the rich boys don’t like, they’ll simply be fired and the shareholders will elect new presidents who do what they want to be done.
And what they want is profit. Nothing else but profit, no morale, no ideals, no principles but money.”
Welcome to reality Pascal. When you take a company public, you sell it to the shareholders. The ultimate game is maximizing shareholder value (greed, in other words).
The shareholders are the ones that should make the big decisions, such as whether to allow management to continue on the path they are on or to accept a buyout offer.
A public company has no room for idealism. If a company wants to fight the “good fight”, then they they need to take the company private (or keep it so).
Mark Cuban has entered the building…
I agree with #87. This is the downside of selling shares to the public. A lot of people get obscenely rich in the process but ultimately you are losing control of your own destiny and the bean counters will determine the company’s future….No wonder the guys at Craigslist are holding out.
Just when it looked that MS was off their backs, it sounds like Yahoo has a bigger and a much more difficult problem to tackle! My guess is that they won’t survive this one. Good luck to Yahoo!