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Carl Icahn Takes on Yahoo's Board
Posted by
Soulskill
on Fri May 16, 2008 01:16 AM
from the ain't-over-till-it's-over dept.
from the ain't-over-till-it's-over dept.
narramissic and several others have written to point out that Carl Icahn has initiated a proxy battle with Yahoo's board of directors over their rejection of Microsoft's bid for the company in February. Icahn has purchased millions of Yahoo shares over the past week and assembled a group of nine other investors (including Mark Cuban) to persuade the board to resume talks with Microsoft. Yahoo remains unimpressed. Icahn's letter to Yahoo accuses:
"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."
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[+]
Technology: Microsoft Bids $44.6 Billion For Yahoo 784 comments
The news is everywhere this morning about Microsoft's $44.6B offer to buy Yahoo. The offer represents $31 a share, a 62% premium over Thursday's closing price; and Yahoo's stock price has been rising in after-hours trading. Microsoft has been making overtures to Yahoo since 2006, according to the CNet article, including a buyout offer last February that was rebuffed. Mediapost.com has some perspective on the deal from the point of view of ads and eyeballs. Such an acquisition, which would be Microsoft's largest by far — it bought Aquantive last year for $6 billion — would need approval by US and EU authorities. A European Commission spokesman declined to comment.
[+]
Technology: Yahoo! Rejects Microsoft's Offer, Says 'Still An Option' 213 comments
mikkl666 writes "In response to an open letter from Steve Ballmer, Yahoo! posted a press release claiming that Microsoft's offer 'substantially undervalues Yahoo!' and is therefore not in the best interest of the company. They also bemoan that the letter 'mischaracterizes the nature of our discussions' and that the threat to make an offer directly to the shareholders is 'counterproductive and inconsistent with the stated objective of a friendly transaction'. Nevertheless, they explicitly point out that a transaction with Microsoft is still an option, but only if they are willing to pay 'a price that fully recognizes the value of Yahoo!'"
[+]
Technology: Microsoft Circles Back to Yahoo With New Offer 143 comments
Ian Lamont writes "Microsoft has come back to Yahoo with a new offer that would involve it buying part of Yahoo. No details have been released, but sources told the Wall Street Journal that part of the arrangement would involve Microsoft selling display ads next to Yahoo search results. No word yet on how this will impact Carl Icahn's proxy war with Yahoo's board."
[+]
Technology: Microsoft Offered $40 a Share For Yahoo 306 comments
fistfullast33l writes "Bloomberg is reporting that a recently unsealed court case by shareholders against Yahoo reveals that Microsoft offered $40 a share for the Internet search company in January 2007 and Yahoo turned it down. We've extensively discussed Microsoft's bid for Yahoo earlier this year for $33 a share, which was rebuffed. Investor Carl Icahn has launched a proxy fight against Yahoo over the spurning of the Microsoft deal." CWmike notes Computerworld's coverage of the revelations: "The complaint places much of the blame on [Yahoo CEO Jerry] Yang, describing him as someone with a 'well-known' antipathy toward Microsoft who acted out of a personal interest to keep Yahoo independent. Something wrong with that? Oh, yeah... public company."
[+]
Technology: Yahoo Ends Talks With Microsoft, Embraces Google Instead 214 comments
snydeq writes with a story from InfoWorld which says that "Yahoo has ended its talks with Microsoft and is instead nearing an agreement with Google. Yahoo's purported reason for breaking off the talks? That Microsoft was only interested in purchasing Yahoo's search business, not all of the company. 'Such a transaction would not be consistent with the company's view of the converging search and display marketplaces, would leave the company without an independent search business that it views as critical to its strategic future and would not be in the best interests of Yahoo stockholders,' the company said in a statement. The deal with Google allegedly involves Yahoo's search advertising business. The move likely will draw more ire from Icahn and may in fact remain part of the elaborate poker game between the two companies. Microsoft said this alternative transaction remains on the table and did not confirm that talks between it and Yahoo have concluded." Update: 06/12 23:58 GMT by T : CWmike writes "Just hours after saying it ended talks with Microsoft, Yahoo announced that it will start running advertising from Google alongside Yahoo search results. Yahoo expects the deal, which has a 10-year term, to generate $250 million to $450 million in operating cash flow during the first 12 months."
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Yahoo Rejects Another Bid From Microsoft, Icahn 119 comments
Last night Yahoo rejected another offer for its search business from Microsoft and investor Carl Icahn. The proposal also included conditions that would have required the replacement of Yahoo's top management and board of directors. This is not the first time Icahn has pushed for such a measure. Quoting:
"Yahoo said in rejecting the offer it told Microsoft it was willing to sell the entire company for at least $33 a share and its board believed such a deal could be negotiated and executed before its annual shareholders meeting on August 1. Yahoo said it also informed the software giant it remained willing to negotiate an 'improved search-only transaction.' Microsoft, however, rejected both offers, Yahoo stated."
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It's not completely their fault (Score:5, Funny)
Re: (Score:3)
Re:It's not completely their fault (Score:4, Insightful)
This is Slashdot, for heaven's sake - the most popular place on the Interweb where one of the world's richest men can take the billions he has personally earned as the Former CEO of one of the most successfull software companies in the world and give it away to save lives and fight HIV/AIDS and a host of other diseases that kill millions of children each year...and be called "evil".
--ScottKin
Parent
Re:It's not completely their fault (Score:5, Insightful)
Take a good long look at what the that foundation donates. a decent percentage of it is is windows software which costs bill G nothing to make another million copies of. He then writes off the full retail (not OEM, but retail) value of the software. As if someone was buying boxed copies of the software.
the Oil tycoons, and steel tycoons of old at least built things that the public could visit, and use. Bill G is too cheap to even do that much.
Parent
Re: (Score:3, Insightful)
Take a good long look at what the that foundation donates. a decent percentage of it is is windows software which costs bill G nothing to make another million copies of. He then writes off the full retail (not OEM, but retail) value of the software. As if someone was buying boxed copies of the software.
I have a long and proud history of Microsoft-bashing, but you've been modded +5 Insightful (as of when I write this) by alleging some really nasty things without a source. This is a very serious suggestion - you're basically saying that Bill Gates's foundation engages in tax fraud. Also - Bill Gates doesn't own Windows, Microsoft does. Maybe he gets a discount, but it certainly wouldn't be free as you suggest. Do you have a source or documentation for this?
Re: (Score:3, Insightful)
Osama Bin Laden gives money to orphans that doesn't make him a saint.
Giving money away doesn't undo what you have done.
Re: (Score:3, Insightful)
Are you fucking serious? Osama Bin Laden KILLS PEOPLE.
How fucking out of touch do you have to be to compare Bill Gates to Osama Bin Laden?
Re:It's not completely their fault (Score:5, Insightful)
He's called "evil" because he got his money by
The guy's an ass who's held computing back for the last 25 years through actions that'd get you and me imprisoned, or at least run out of business.
By your logic, it doesn't matter how he got his wealth as long as he gives a little bit away. Well, nuts to that. Warren Buffett's doing pretty OK for himself and I'm unaware of any similar allegations against him.
It's OK that Bill's fake-donating money to charity, but he's still an ass.
Parent
Re:It's not completely their fault (Score:4, Insightful)
Parent
Re: (Score:3, Informative)
Similarly, if the barriers to entry in a m
Re:It's not completely their fault (Score:5, Funny)
Parent
Why is it I know a merger won't be successful... (Score:4, Insightful)
Why is it that I know a merger between Yahoo and Microsoft won't be successful, but Steve Ballmer doesn't? Microsoft has proven, over many years, that it does not know how to run a search engine. Yahoo has proven, over many years, that...
When a mediocre, adversarial company merges into an another mediocre, adversarial company, what will be the result? Cute puppies?
It has been reported that Yahoo employees are against the merger. Maybe that is because many of them will lose their jobs.
Parent
Re:Why is it I know a merger won't be successful.. (Score:5, Insightful)
A Microsoft/Yahoo combination (assuming it's even on the cards any longer from Microsoft's view) would allow Microsoft to replace Yahoo's ineffective technology with Microsoft's superior technology, whilst keeping Yahoo's popular content and websites. Google already has both high traffic and the technology to generate a high amount of advertising revenue from it, which is why Microsoft and Yahoo really can't compete in advertising on their own: Microsoft needs a bigger audience and Yahoo needs better technology. This is the logic behind Yahoo's approach to Google too (i.e. combining Yahoo's audiences with Google's superior advertising technology), but it's nevertheless insane from a business point of view, because in almost every area Yahoo operates, Google is its chief competitor. It really looks like a principal-agent issue, with Yahoo management more interested in securing their own power than in doing what's best for the shareholders who employ them.
If the Yahoo employees behind the company's lagging technology are less than thrilled about a Microsoft takeover, I can certainly understand why: Microsoft have no need of Yahoo's inferior technology, only its audience, so a lot of Yahoo engineers are surplus to requirements. At best these engineers will end up working on technology designed by someone else (i.e. Microsoft's current technology), and at worst they'll lose their jobs. That doesn't mean the deal doesn't make a huge amount of sense for Yahoo shareholders, and the long-run viability of Yahoo as a whole, which it does. If Yahoo continues to be run by inept management, and continues to use technology that isn't competitive with its rivals, it's only a matter of time before it fails, and then these employees will lose their jobs anyway.
Parent
What is the "good technology" from Microsoft? (Score:5, Funny)
What is the "good technology" from Microsoft?
I just used Microsoft's Live.com to search for "aardvark". Interesting: Google returns a link to Firefox's Aaadvark add-on as the second entry. But Microsoft's live.com never lists the Firefox extension in the first 10 pages.
Can Microsoft be trusted not to be adversarial to customer interests in its search results? Apparently the answer is a big NO. Just that one random search convinced me to never use live.com.
Parent
Re:Why is it I know a merger won't be successful.. (Score:4, Funny)
Parent is currently moderated +5 insightful.
+5 Funny would be more appropriate. It is a wonderful joke.
The joke is confusing Microsoft's fantastic marketing prowess, built upon freedom of encumbrance of any form of ethics, with good technology. Besides, everybody at this point knows that Microsoft's developers developers developers have all cashed in their stock options and gone to more interesting work at Google, IBM, and yea even unto Yahoo. The whole point of that Microsoft - Yahoo deal is that Ballmer misses having some developers around.
Parent
Re: (Score:3, Insightful)
Google didn't win by somehow levering legions of users, they won by having better search technology that convinced people to move.
If MS has a better search engine than Google, then why doesn't anyone know about it? It's not like MS is so
Next up (Score:5, Funny)
In other news.... (Score:3, Insightful)
Addendum: (Score:5, Insightful)
Parent
Re:Addendum: (Score:5, Insightful)
Parent
You don't know what Icahn does, do you? (Score:5, Interesting)
-jcr
Parent
Re:In other news.... (Score:5, Insightful)
I don't think Icahn actually believes what he is claiming. He's just claiming it so that he can make even more boatloads of cash.
The Yahoo deal would have made a lot of people like Icahn richer. They take the profits, run and do they really care what happens to Yahoo? No they don't.
If you think the deal doesn't make sense, then the people who should worry should be the people owning Microsoft shares.
The founders of Yahoo may not like their baby being destroyed in the long run, but that's what happens when you take a company public - it's no longer 100% in your hands.
Parent
Re:In other news.... (Score:4, Interesting)
He recently tried to do the same thing to Motorola (disclaimer- I'm a current shareholder of MOT, and despise him) before the shareholder vote kept him out of the board- he still sued the company to force Motorola to sell its mobile business so he can cash out quickly.
Interestingly, he owns a hefty stake of Take Two. He may try the same shit if EA comes back with a bigger offer.
He has no other vision than seeing dollar signs as quick as possible (at any cost) and doesn't care any about the long-term health of the companies he plunders. Thousands have lost their jobs and even more small-time retail investors have been trampled on by him.
He's the worst kind of trader. In fact, I welcome short hedges more than seeing him scoop up shares of companies that I have positions in.
Parent
Re: (Score:3, Informative)
Money slaves.. (Score:2, Informative)
"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"
Right..like they do care about that..they only want to cash out...money slaves.
Re: (Score:3, Insightful)
It would be more accurate to say he sees it as a way of making an enormous quantity of money in a very short time. Whether or not that would happen to screw a bunch of people is really not of any consequence to him.
Re: (Score:3, Insightful)
Re: (Score:3, Insightful)
What about the Yahoo board asking 40 USD? What about Jerry Yang who rejects 33 USD and does not even take that to the board?
What ICahn is doing is telling Yang to go take a flying leap. I think Icahn is right here.
Yang let his emotion of hating Microsoft get in his way of business. If Yang had owned 51% of the shares then that is his right. BUT Yang owns about 43 million shares of 1.4 billion. This means he can say squat on what "his" company can or cannot do.
haha (Score:5, Insightful)
I can only imagine what would happen by taking yahoo's infrastructure off free bsd and putting it on windows.
Google might just be loving this.
Yahoo! (Score:5, Insightful)
I had given up hope that Microsoft would fire their legendary footgun at a Microwho? deal. I hope they blow all their available cash on this.
The synergy of this opportunity rivals a .com bubble for the ability to vanquish vast quantities of value.
Now I can look forward to reading about this in the news [google.com].
I don't get it. (Score:4, Interesting)
Re:I don't get it. (Score:5, Informative)
Simply put, in a few months the M$=B$ PR machine would rewrite history, add Yahoo market share and revenue to MSN's lack of market share and revenue and then claim all those gains for MSN as a result of Ballmer's skill, rather than simply buying those numbers in at a loss.
Parent
Competition in the search engine market (Score:3, Interesting)
Translation (Score:5, Insightful)
Though luck Icahn, betting on a single stock is stupid, go back to your books and study what "idiosyncratic risk" means.
Re:Translation (Score:4, Insightful)
Yahoo's board screwed up big time by trying to stay independent. Guess what? Google owns internet advertising and search. Neither Yahoo or Microsoft can really make much of a dent in it alone. Quite frankly, I'd much rather see a merger between them give Google some actual competition, because alone neither one is going anywhere. There is of course no guarantee that a combined company would actually be more competitive, but I find that more likely than Yahoo's fortunes suddenly doing a 180.
Parent
Re:Translation (Score:5, Insightful)
Parent
Re:Translation (Score:4, Insightful)
</rant>
Parent
Traditionally (Score:3, Insightful)
Now it's a complex poker game and you aren't buying shares because the company will do well but so that you can sell those shares on quickly and make a profit.
Which isn't *necessarily* wrong except that, since this money is not gained from the output of the company, can only come from the poor investment choices of other people.
In other words, it concentrates the wealth into the h
Re: (Score:3, Insightful)
What offer? (Score:4, Interesting)
From TFA: "I and many of your shareholders strongly believe that a combination between Yahoo and Microsoft would form a dynamic company"
Microsoft, on the other hand, says it is no longer interested http://www.microsoft.com/presspass/press/2008/may08/05-03letter.mspx [microsoft.com]
Re:What offer? (Score:5, Insightful)
Either way, if yahoo can't fight this somehow, they're done. Nobody that has a clue is going to stick around hoping MS gets this one right. If people wanted to play with MS, hotmail and others would have been an automatic winner, and this wouldn't even be an issue.
As with a previous poster, I hope this puts a nice dent in their wallet, and burns them all. Not just because MS needs a rung kicked out, but as an example to other companies that buying out the competition in order to destroy what made it competition, is a stupid idea.
Parent
When I see something like this.. (Score:4, Interesting)
Even if regulated accounting doesn't float your boat, the ideas of Fischer Black (eg. http://www.amazon.com/Fischer-Black-Revolutionary-Idea-Finance/dp/0471457329/ref=sr_11_1?ie=UTF8&qid=1210920867&sr=11-1 [amazon.com]
) can't be ignored. Under that light, the entire deal seems to be more involved in noise trading than any solid economic expansion.
Re: (Score:3, Insightful)
Yahoo was... (Score:5, Insightful)
...the big cheese until a couple of guys in a garage fucked it up for them. Yahoo failed to adapt.
Microsoft was the big cheese until they fucked it up themselves by releasing an unstable (moreso than they usually do) product. They'll probably fail to learn their lesson.
Merging a company full of fuckups with a company full of fuckups will still give you a company full of fuckups - just bigger. Even so, Google doesn't have its own OS, and that would significantly contribute to Yahoosofts's power. (I'd say Microhoo, but it sounds dirty.)
Icahn's a Pain in The Ass (Score:5, Informative)
Even before Apple's iPhone came out and smacked Moto's RAZR out of the park, it was clear that Moto needed to be doing R&D for the next-gen handsets. Oh, and you might want to keep some cash around in case of a rainy day. Icahn got handed his hat. And Moto did a bunch of weird acquisitions.
These days, it's raining pretty hard at Moto. I'm sure that pile of cash is helping them through the lean times.
All of which is a roundabout way of saying: Carl Icahn is a vocal, over-exposed pain in the ass. Whenever he talks, put your hand over your wallet, and pay very careful attention to what he's doing with his own.
Schwab
Re: (Score:3, Insightful)
Icahn is right! (Score:3, Interesting)
Whatever you think of microsoft as a company doesnt matter.
The yahoo board is supposed to represent its shareholders, if I hold stock in a company and someone offers 72% more than the shares are worth, and the company wont even let me consider the offer id be pissed too!
Icahn doesnt have a duty to yahoo, yahoo has a duty to its shareholder to act in their best interests
even if it means selling out to microsoft and losing their cushy jobs.
Sometimes not everything is black and white.
Re: (Score:3, Interesting)
This would have been a better deal for Yahoo than Microsoft. Yahoo shareholders would have gotten an "out" from that struggling company, but Microsoft would have been stuck with yet another Internet property that can't compete with Google's advertising business.
If I were a Yahoo shareholder, I would be pissed at the board rejecting Microsof
Illogical conclusion (Score:5, Interesting)
Microsoft + Yahoo = "Dynamic" ?
I think he's way off base. If Microsoft is going to be a Dynamic Duo with anyone, it would be more likely some organization that thinks like them and can compliment their business practices, such as:
Microsoft + Halliburton
Microsoft + SCO (oops, already happened)
Microsoft + Phillip Morris
Microsoft + the Mafia
Microsoft + Dow Chemical
Microsoft + Exxon Mobile
Microsoft + Yahoo = .. (Score:3, Insightful)
Not exactly, remember they were in the search and email business before Google. MS strategy for success is invariably, buy up some vibrant company, like Hotmail, re brand it as Microsoft Whatever, use the Windows desktop monopoly to leverage it. Eg, every software update, installs Outlook, adds Microsoft affiliate web sites to Favorites and makes Microsoft.com your home page.
Design Microsoft services to make using third party services a jolting experience. Eg. Disable