Yahoo is pulling out its biggest gun in the showdown with Carl Icahn: the Yahoo homepage itself. Right now on Yahoo.com, the single most-visited page on the Web (with 304 million unique visitors worldwide in May, according to comScore), there is a big purple button the third box down aimed squarely at Yahoo shareholders. The button takes people to this page where Yahoo outlines its argument against investor Carl Icahn, who wants to replace Yahoo’s board, fire Jerry Yang, and then restart negotiations with Microsoft (an effort that is not going so well).
Yahoo is in a battle for its life, and it is using the reach of its homepage as a weapon in its proxy battle against Icahn. It is trying to persuade every single Yahoo shareholder to vote against Icahn’s proposal to replace Yahoo’s board. Yahoo is going straight for Icahn, attacking his credibility as an investor. At the top of the “proxy facts” page that the button takes you to there is the following quote:
“It’s hard to understand these technology companies.”* – Carl Icahn
Then Yahoo reproduces one of the slides that it filed with the SEC at the end of June, which shows Icahn’s dismal track record recently as an investor (which is an easy trick in this market):
All Yahoo has to do to defeat Icahn is convince a majority of voting shareholders that he is wrong and not qualified to control the fate of the company via his hand-picked board. Taking the battle to the homepage shows how close it may turn out to be. Every single vote counts, and Yahoo is not shy about using its Web real estate to put up a sign arguing its case. It doesn’t say much for the editorial independence/neutrality of the homepage, but when you are fighting for your life those sorts of considerations are thrown out the window.
Update: Yahoo has already convinced one of its biggest shareholders, Legg Mason’s Bill Miller, who just announced that he will vote his 4.4 percent stake in Yahoo to support Yang and the current board. If Yahoo’s biggest shareholder, Gordon Crawford, does the same. It’s game over for Icahn.
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Whatever happens, Its just sad to see Yahoo go thru all this.
I may have not used Yahoo much since Google came out but still no pioneer should have to go thru such strange struggles.
Pioneer or not, Yahoo! is a business, not an old buddy who is down on his luck.
The fact that you now use Google and not Yahoo is a big part of why they’re in the trouble they’re in
Really interesting stuff, it’ll be funny watching how this plays out. I actually hope Icahn loses.
Icahn has just profits in mind, he doesn’t care about the future, if he doesn’t like the stock he should sell it. I saw Mark Cuban also in the Icahn’s proposed new Board of Directors list.
I hate to break it to you Chris, that the way business works and unfortunatly Yang and the other Yahoo’s didn’t make a compelling argument (at least not to Icahn) why they wouldn’t sell the business for what was percieved to be a fair market value.
Icahn is a shareholder in the company. That means he owns part of the company and as voting rights to make decision that impact the future of the organization. His grip with the board is that they didn’t act in the interest of the shareholders and is now challenging them. Looks to me like he is taking an appropriate appoach when he has a grievance with a board of directors in he company he owns shares in.
People can’t look at this as an outsider attacking the company…its a major stockholder in the company.
nought on the UK site
(btw the comments are all messed up on firefox but ok on safari for some reason?)
Go Yahoo…keep holding on. Squeeze Microsoft for as much cheese as possible. The long they wait the more money they can get.
Not that I am a fan of Microsoft, but their $33 a share offer was respectable and worthy of a merger. I don’t feel bad for Yahoo one bit.
why should a company merge, if they don’t want to? Just because you are offered money doesn’t mean you have to sell
Feduciary responsibility to maximize shareholder value. Whether or not selling to Microsoft–and at what price–would do that is really the point that’s being debated here.
(Note that I’m not a Yahoo employee or shareholder, so I don’t have any vested interest in any of this. It is an interesting sideshow to watch, though.)
Fiduciary responsibility should not be so narrowly defined as to mean “catering to the short term”. The majority of equity investors are in for the long haul (e.g. 10 years) because they know that market gyrations and the short-term influence of short-sellers works against them in lesser time-frames.
@ Rich:
Especially if you are long-term investor, you’d have to seriously believe that Yahoo has huge growth potential in order not to find MSFT’s offer attractive. This offer may be Yahoo’s only term - long or short.
I am behind Yahoo! Keep up the fight!
GO YAHOO!!! Icahn is a f’n disaster!
Pathetic. This represents nothing more than a last ditch effort of the board to save their own jobs.
It isn’t going to matter though as by now the vast majority of Yahoo’s shares will be owned by institutional investors and they aren’t going to be swayed by something like this.
Yahoo! I got your back.
I can’t hold Yahoo! stock, but if I could, I would, and I’d vote FOR Yahoo!
Microsoft is probably willing to pay more but they just don’t want to toss too much money at Yahoo. It probably will happen, it’s just a matter of time… http://blabtech.blogspot.com
I agree with Yahoo here. Icahn is a idiot. The guy just wants attention. Just another bored billionaire trying to make some noise.
Nice post Michael!
Watching Yahoo at the moment is like seeing a disaster happen in slow-motion.
I have always liked Yahoo - it’s sad to see this happening to them; regardless of who’s to blame.
Thanks Michael,
Jim Connolly
The Tech News Blog
Erick wrote this post. Not Mike.
Same thing. Erick has turned into Arrington’s mouthpiece in all things Yahoo.
I have to say my respect for Yahoo just shot up ten points. You go guys. Why not use the homepage? What kind of “editorial independence / neutrality” do we expect from an internet company. It’s a lot less sell-out that all the ads plastered across websites. Their chart is very convincing. I’m just sad that after all this fighting and the stream of people leaving there won’t be much of the old Yahoo left to save. There’s a lot of things they’ve done wrong over the years but there’s some things they’ve done very right.
Icahn is a loose cannon. As for Microsoft, it would botch this merger just like it botched Vista. An indepedent and strong Yahoo is better than a merger with Microsoft. There is no way a Microsoft/Yahoo merger can be good for the public or the Internent.
My vote goes to Jerry… ;o) The only thing you need to ask yourself is.. whts wrong with Yahoo! Some bad elements are forcibly trying to make it sick…!
Erik - Are you associated with Seeking Alpha by any chance? It seems you copied or they copied your post on this - with same title? Just curious!
Uber-pathetic on Y’s part.
I love the quote slightly amended from the usual stock performance warnings about:
“Past performance of … Icahn … may not be indicative of future performance of the same”
In this market its crazy to just list stock changes like that without any reference to how well the industry is performing. It tells you nothing. Take those top two pharmaceutical companies that are 20% and 15% down. If the pharmaceuticals industry as a whole is 40% down then they’ve done well. If the Yahoo! shareholders fall for that then they deserve everything they’re going to get!
What I find so funny about this whole thing — and can’t we already imagine the HBO made-for-cable mini-series based on the last 6 months? — is the fact that the only thing, and I mean the ONLY thing, standing in the way of an end to the egotistical drama is a lousy $33 per share. Does anyone thing Legg Mason sided with Yang because they like his managerial expertise?? The play here by EVERYONE — including Legg Mason, Yang, Icahn, et al — is to compel Ballmer to pony up that $33 per share. After that, we can all go home and get some much-needed west and we-waxation, wight?
I doubt that an Ichan board would do anything then a quick sell-off and eventual destruction - so that is really not a great choice unless you are really interested in maximizing shareholder value this week - however the current management leaves much to be desired as we know.
The ideal Y! solution would be to kick Ichan, retire Jerry and get a competent operator with a green card to clean house. (one that uses email this time please)
GO YAHOO!
I love it - it’s an asset they have that they should leverage… cool to see them respecting their viewers enough to bring it to their attention and ask their opinions.
Of course, the feedback they get might not be so great (have you seen the trolls who respond to the Yahoo articles??? Yuck.), and it’s not a slam-dunk, but I think it respects the users/viewers/visitors.
Jason Alba
CEO - JibberJobber.com
I have to give “Thumbs Up” for Yahoo! We are all pulling for you at the Googleplex!! Jerry, has to use all his guns and go all out, that’s what founders do!!
Wow those statistics about his previous experiences with public companies is pretty disastrous. You have to understand the motives of Icahn… he is business man that wants a return on his multi-million dollar investment as soon as possible, even if that comes at the expense of a major internet entity that has future plans for growth and a tremendous amount of bran equity…. http://www.readtheanswer.com/index.php?RTA=web2
I must say I’m pleasantly surprised to see that Jerry Yang has a more solid testicular constitution than I previously thought. If you’re going to battle a rogue billionaire investor you’ve got to bring out the big guns and it doesn’t get bigger than the Yahoo homepage.
To GBC above and his comment about institutional investors: Legg Mason announced today it will back the current board. That’s about 5% of outstanding Yahoo stock right there. So Yahoo is already 10% to the majority they need.
I hope Yahoo! wins. Icahn sucks!
Go Yahoo and Jerry! I think Yahoo will survive this turmoil and emerge ever stronger. Icahn is just a rich man who knows nothing about technology and wants to screw up a respectable company.
I don’t feel bad for Yahoo either, but it’s glad to see them flex at least a little bit of muscle. Icahn is a dinosaur with no clue how this industry works.
The problem of being a Public Company is you can not choose your investors! Tech Skills are of no interest to a corporate Raider ! They have no heart they exist for Profit!
Emotially I’m w/Yahoo.
However, as a shareholder I’m with Icahn. Yahoo will not see $30 within the next 3 years.
I can take that $30 today and put it into something else that will be worth more than $30 in 3 years.
Another great twist in the plot. *Love* it!
The first really awesome bold move by Yahoo! That rocks.
Go Jerry! As a former Yahoo! I believe it can go back to the FUN and innovative company it once was. Get rid of Icahn. He’s distracting you. Leverage your data and your millions of users and start talking to them and getting them to engage with you more. Start thinking about how the social web will work with you. Focus, focus, focus. Use your data as your competitive advantage and knock Microsoft to its knees.
I wonder if it ever becomes improper for the CEO of a public company to use company resources to keep himself in power.
Funny, btw: Said button is only on the Yahoo’s U.S. page - on Yahoo.de there’s no trace of it. Then again, of course I don’t know what percentage of Yahoo shareholders live outside the U.S.
Just sayin’
GOO YAHOO!!!!!!!!!!
1) Please don’t tee off on Icahn as an “idiot.” How many “idiot” billionaires are there, really? Obviously on net this guy makes tons of money, across many different industries.
2) Yahoo is just recently starting to use its own web resources in this battle, and we’re to believe Jerry “gets it” but Icahn does not?
3) Don’t confuse remaining independent with success. I worked at SEBL when we turned down MSFT’s offer of $30/share. We then struggled against ORCL and SAP on our own, and ended up being bought by ORCL a few years later for something like $9/share. With MSFT we would’ve had a more innovative new owner and more exciting future than with ORCL, plus 3x the payout. Whoops.
4) Very hard to tell how this will play out. I was in the audience when PSFT’s CEO Craig Conway announced confidently that “the ORCL saga is over” — meaning ORCL had failed in its hostile takeover of PSFT. A few months later, the board found an excuse to fire Conway for gross negligence and they sold to ORCL. The board will turn on Jerry in a second if it gets a good deal done. Jerry will get millions in a severance package. If anyone gets left holding the bag, rest assured it will be the common shareholders. That’s why Icahn is one of your best friends.
5) Beware looking to GOOG as the white knight. GOOG is every bit as competitive as MSFT with their thin veneer of “do no evil.” Any company that goes up against MSFT for years is going to come away very sharky just from all the practice. Will be interesting to see true colors emerge if a GOOG phone comes out vs. iPhone.
Desperate company. Desperate measures.
Remember the offer from MSFT a couple years from now people…45 billion.
This deal will get done under 30 billion.
Yahoo absolutely needs to get aggressive. It appears depressed–Jerry needs to show some balls or put someone in front who has them. I’d love to run that company.
You know, I have not been a big fan of many of the moves the executives at Y! have made recently, but this one has my full support. Finally they are at least showing they had some fight left in them. Who wants to keep people in charge that aren’t even willing to fight for what they believe in? Its a big boost for Y! to see some direct action, and if Carl Icahn thinks he has a big mic with his random press releases negotiating for a company he has no official position in yet(bad form sir, bad form), then he can see how big a mic the Y! homepage is. I don’t want this guy on my board, mostly because his actions show him to be an underhanded backroom operator who is only looking at his bank account. If he couldn’t get $33 a share he would sell Y! for anything he could get, and I want a board that actually sees a future for the company. I agree that the current folks have made some mistakes, but this ongoing (read: never ending) situation has forced a change in them for the better. Finally we are seeing some spark of life left in Y! and I for one am all for it!
The academically correct way to compare Icahn’s effect on the stock price is to
first compare the way in which the overall market has developed since the start of involvement to the stock price (called systematic risk),
then compare how much over or under that change there has been in the stock price to one way or another (called non-systematic risk).
Its about time Yahoo realized that it might be able to leverage its #1 alexa ranking to fight Icahn! They should have leveraged their traffic/users to make this a pr stunt weeks ago!
I hope Icahn does go down in defeat. He doesn’t care about the company, just his stock. He certainly isn’t an idiot but how much time has he spent following Yahoo prior to Microsoft’s offer? He saw an opportunity to make a quick buck and he’s taking it.
I would love to see Yahoo stay independant. Yahoo doesn’t need Microsoft as much Microsoft needs Yahoo. Without Yang and Co., Microsoft is a pathetically small player in search and advertising. Ballmer needs to really take stock of what’s important for the company. Is it work spending billions to still be dramatically behind Google? Or should they focus on getting an OS working right and continuing to evolve Office which is their bread and butter?
i’m surprised yahoo turned around a new website that quickly
Billionaires are not immune from idiocy.
anybody care to put up a chart showing yahoo’s performance after Yang took over ?
Awesome. I love that they are that gutsy. I’m rooting for you. The web needs you to survive or we’ll all be forced to see a lot more really crappy products from Google. (other than their search engine of course, but even that is overrated at this point.)
yahoo survives, grow, prospers …. i know, spolier alert, i saw the movie already on the subtle plane
Sweet, prime ad inventory being used to save management rather than create shareholder value.
Let Yahoo live and propser!
Yahoo! is doing a smart thing, and one which makes me feel more confident in them. In a strange way, if Yahoo! wins it will be a win for the little guy.
Love it Love it Love it — GO YAHOO!