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How Many Billionaires Does It Take To Screw in a New Yahoo Light Bulb?

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How Many Billionaires Does It Take To Screw in a New Yahoo Light Bulb?

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Carl Icahn, the billionaire with the shotgun in Yahoo’s ribs, has picked up a couple of friends to hand him bullets.  

Third Point LLC, a $6 billion hedge fund, has picked up five million shares in Yahoo on its way perhaps to 10 million shares and is supporting Icahn’s proxy battle to overturn the Yahoo board and sell the joint to Microsoft, Reuters said.  

And Texas oil billionaire T Boone Pickens announced on CNBC that he has bought 10 million shares and is supporting Icahn with his ~0.75% piece.  

Paulson & Co, another hedge fund with 50 million shares, has already thrown its 3.7% support to Icahn.  

At this point, however, Icahn and friends not only have to persuade Yahoo to sell they also appear to have to persuade Microsoft to buy or else they’re on a fool’s errand.  

Microsoft CEO (and billionaire) Steve Ballmer said from Israel today that “We are not bidding to buy Yahoo,” according to Reuters. “Yet we are trying to have discussions about deals with that might create value, but not a whole acquisition of the company.”  

On the other hand, Kevin Johnson, the guy in charge of Microsoft’s Internet business, said in a widely quoted internal e-mail over the weekend that plays to the schizophrenia of the situation, “The fact is that we are not where we want to be in this business yet and we’ve been in this position longer than we’d all like.”  

As far as anybody knows the proposal Microsoft has supposedly tabled is to buy Yahoo’s search business – worth an estimated $21 billion according to Collins Stewart analyst Sandeep Aggarwal – and take a minority stake in what’s left after Yahoo sells its Asian interests – which may be worth $9.25 billion, Aggarwal said.  

It’s hard to conceive that Yahoo would find this proposal superior to Microsoft’s initial $31-a-share bid. It doesn’t smell right.  

Together Yahoo and Microsoft own about 27.2% of US search to Google’s 62%, according to Neilsen Online.  

Anyway, all the renewed talks seem to have accomplished so far is keep Yahoo search advertising from collapsing into Google’s arms while Microsoft is proposing to start paying users who buy products they find through Live Search and stick it to Google with its pay-per-click model where merchants pay every time their ad is clicked.  

Microsoft’s cost-per-action model, based on widgetry it got with its acquisition of the Jellyfish comparison shopping site last October, would have advertisers pay only when a customer buys something or completes a specific transaction.  

The so-called Cashback scheme, which eBay, Barnes & Noble.com, HP, Overstock.com and Sears are backing – Microsoft says the Cashback portfolio includes 10 million products from 700 merchants including 13 of the top 40 US retailers – is just a step away from what Yahoo-made billionaire Mark Cuban, one of the boys on Icahn’s alternate slate, suggested and that is to pay the very best of Google, the core of its accounts, to leave the Google Index, and issue advertising credits to anyone else who simply left Google. (See www.blogmaverick.com for the math.)  

Meanwhile, the shareholders suing Yahoo down in Delaware over the Microsoft bid are trying to get documents Yahoo wants hidden made public to help Icahn along.  

The documents involve the currently redacted claims made in the suit itself, notes from a conversation between Jerry Yang and Steve Ballmer and details about that merger-stymieing employee severance plan Yahoo came up with after Microsoft first announced its interest in the company at the end of January.  

Yahoo stands accused of trying to “sanitize the public record.”  

See www.live.com/cashback.


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