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Carl Icahn Takes on Yahoo's Board
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."
What are the odds that the FTC would actually allow a merger like this anyway? I mean the evil power of Microsoft coupled with both of Yahoo's users could mean serious trouble.
"Never let your sense of morals prevent you from doing what is right" - Salvor Hardin
Cue Shatner screaming "Icaaaaaaaaaaaaaaaaahn!"
Program Intellivision!
... having boatloads of cash doesn't make you smart. Icahn is an idiot if he believes that a) Yahoo and MS can merge peacefully, and b) Yahoo brings anything other than a brand to MS. MS doesn't want anything other than Yahoo email users, Yahoo portal users and Yahoo search engine users. Note to MS: users come and go. You tried it before with various other web companies, and it didn't work then. It won't work now.
Those who can, do. Those who can't, sue.
I'm not even convinced that this is a legitimate play by Icahn to make MS/Yahoo be more competitive with Google. If I'd have a billion dollars to invest, and I'd know that a merger would pump a company's stock price by 72%, I'd try to buy enough influence to make that happen. Icahn would make out like a bandit even if MS/Yahoo go down in flames the day after the deal is signed.
Those who can, do. Those who can't, sue.
"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.
If Microsoft does to yahoo what it did to hotmail and other companies, google's number 1 competitor is history.
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.
Contrary to popular belief, Unix is user friendly. It just happens to be particular about who it makes friends with.
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.
Help stamp out iliturcy.
I can see how Yahoo would help Microsoft compete with Google. But how does Microsoft help Yahoo?
He doesn't care about a merger, he wants Yahoo to pay him to fuck off. Look up "greenmail" on wikipedia.
-jcr
The only title of honor that a tyrant can grant is "Enemy of the State."
How come FTC hasn't looked into the antitrust implications of this merger? If Microsoft and Yahoo are allowed to merge, the US search engine market will be split between only two companies, a dangerous situation. Moreover, one of them, Microsoft, had been already convicted of possessing a monopoly in the desktop OS market and using its market power in operating systems to tie its secondary products with the OS, thus gaining an unfair advantage over other software and service vendors. Even if the FTC allowed Microsoft and Yahoo to merge, they should seriously consider forcing Microsoft to give the consumer a choice of creating a gmail account and say getting google bar instead of automatically getting the standard MSN setup.
Though luck Icahn, betting on a single stock is stupid, go back to your books and study what "idiosyncratic risk" means.
What offer is this idiot talking about?
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
I've followed the /. headlines over this lack of a deal, and have been generally surprised by the neoliberals ordaining that the yahoo board had a duty to sell the company for short-term advantage. Despite the fact that under any decent discount rate, the whole proposal represented little more than a bet.
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
) can't be ignored. Under that light, the entire deal seems to be more involved in noise trading than any solid economic expansion.
...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.)
Random Thoughts From A Diseased Mind (Not For Dummies)
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
Editor, A1-AAA AmeriCaptions
investers were investing in the long-term health of the company. Dividends were the method they gained as the company did better.
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 hands of the wealthy.
My wife tried to register big_trash as a user name for Yahoo email. But that name was already taken.
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.
MS wants Yahoo primarily so it can infect everyone's Windows PCs with its Silverlight technology (which was dubbed the "Flash Killer"). That won't happen due to this initiative: http://www.adobe.com/openscreenproject/ Give up MS, you are destined to become a Linux software development company. The MS Windows era is coming to an end. Hypnotic dreams of Switzerland are calling to you Mr. Balmer... shortly it will be time to materialize those dreams.
You have to understand the economics of the situtation to understand why this would probably be a good combination. Yahoo has a very large web audience, but has had difficulty generating advertising revenue from it, i.e. its technology isn't very good, so it isn't making as much money selling advertising as it otherwise could. Microsoft has the opposite problem, i.e. good technology that can convert traffic into advertising revenue, but it was much too late to the game, so it lacks a sufficiently large audience, and there's no reason for Yahoo or Google users to switch (even assuming Microsoft's content is as good, which is questionable).
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.
The BBC has a reply to Mr Icahn from Roy Bostock today - http://news.bbc.co.uk/2/hi/technology/7404012.stm
in which Mr Bostock states that it is not in the shareholders interests to allow Icahn and his "handpicked nominees" to take over.
This is going to get very interesting!
Awful UID - but I have been here ages...
Yahoo is not the #1 search engine and even if microsoft took it over they still wouldnt be.
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.
So according to this guy:
...
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
I can see how Icahn angers just about everyone on this forum, but look at it from another angle. He buys 59M shares, walks right up to the chief and says fuck you, pay me. This is a textbook example of greenmail, and he will probably force a nasty proxy battle which will result in him destroying Yahoo by giving it to Microsoft. That's what happens when you take a company public, so everyone including Yang should stop crying. He knew exactly what he was getting into.
Microsoft + Yahoo = MicroHotHoo :)
.. :)
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 links to Youtube.com, filter third party greeting cards in Outlook and so on.
Present the ubiquity of such Microsoft product as evidence of the popularity of same. It must be good, everyone chooses it
davecb5620@gmail.com
"Microsoft has the opposite problem, i.e. good technology that can convert traffic into advertising revenue, but it was much too late to the game, so it lacks a sufficiently large audience..."
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.
Icahn "misunderstands" Microsoft proposal
Sent from my desktop computer
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.
Good technology will be successful on its own merits, especially with a company like MS funding it. You could make a decent argument that Google was late to the game, when they came on the scene Yahoo was already well established, and there were other players like Altavista.
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 some obscure company that's new to the scene. And beyond searching, what other web "technologies" does MS really shine in? Is hotmail any better than yahoo mail? Are either of them better than gmail?
I understand the basic principle that you're getting at in why the merger might seem to make some sense, but I don't think reality really backs it up. It's more likely to me that MS just doesn't know what the hell to do about Google, so Ballmer just decided to do something. He chose something big and bold to make it look like he has some sort of master plan, and he used the same logic that you're describing to try to convince investors that it'll work.
But when you really look at it closely, it's a silly plan. MS doesn't have any magical technology that they just can't get people to look at. Nor do they have any sort of awesome internet plan that just needs eyeballs to take off. Add in the reality that the process of merging two companies of that size would likely involve a couple years of disarray, and you're creating a great opportunity for Google to increase their lead even further.
The merger has been a terrible idea from the beginning. And I'll bet most MS employees frowned at the potential deal just as much as most yahoo employees, whether they feared for their jobs or not.
One time I threw a brick at a duck.