Yahoo to Icahn: Get a Clue

Billionaire investor Carl Icahn thinks Yahoo "completely botched" Microsoftis unsolicited buyout offer and is mounting his own attempt to take over the search and Internet advertising companyis board in an effort to get the Windows Vista maker back to the table. Yahoo, however, apparently thinks Mr. Icahn needs to get his facts straight before making accusations.

Roy Bostock, Chairman of the Yahoo Board of Directors, said in a letter to Mr. Icahn "Your letter reflects a significant misunderstanding of the facts about the Microsoft proposal and the diligence with which our board evaluated and responded to that proposal."

He added "A fair-minded review of the factual record leads to one conclusion: that Yahoois ten-member board, comprised of nine independent directors along with Yahoo CEO Jerry Yang, remains the best and most qualified group to maximize value for all Yahoo stockholders."

Mr. Icahn, however, isnit so sure Yahoo is on the right track. "It is quite obvious that Microsoftis bid of $33 per share is a superior alternative to Yahoois prospects on a standalone basis," he said.

To help drive that point home, Mr. Icahn has formed his own proxy board in an effort to oust Yahoois current board in hopes of bringing Microsoft back to the negotiating table. The proposed roster includes Mr. Icahn; lieutenant Keith Meister; Dallas Mavericks owner Mark Cuban; former Viacom Inc. Chief Executive Frank J. Biondi Jr.; venture capitalist and brother of Dell CEO Michael Dell, Adam Dell; Harvard professor Lucian Bebcuk; former Nextel Partners CEO John Chapple; former CEO of the ad agency Gray Global, Edward Meyer; money manager Brian Posner; and the founder and co-CEO of New Line Cinema, Robert Shaye.

Yahoo contends that Microsoftis higher offer wasnit exactly what Mr. Icahn claimed. The US$2 per share increase from $31 to $33, according to Mr. Bostock, was never actually presented in writing, nor were there any details offered about a cash and stock mix.

While Mr. Icahn seems ready to move forward with his plan, thereis no indication that Microsoft is on board. The Redmond-based company walked away from the negotiating table after deciding that the deal no longer made fiscal sense.

Microsoft presented Yahoo with an unsolicited buyout offer in February for $44.6 billion in a move to chip away at Googleis market leading position in the online search advertising market.

Mr. Icahn has pushed company mergers through in the past, and looks ready to do it again with Microsoft and Yahoo. The Yahoo board, however, looks to be standing its ground. "We continue to believe that Yahoois current board has the independence, the knowledge, and the commitment to navigate the Company through the rapidly changing Internet environment and to deliver value for Yahoo and its stockholders," Mr. Bostock said.