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.
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
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
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
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
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
Yahoo stands accused of trying to “sanitize the public