Fighting off Microsoft cost Yahoo $36 million in fees

In an SEC filing, Yahoo reported that through June, it spent $36 million on fees for third-party advisors helping it deal with Microsoft's unsolicted bid for the company and all its fallout. The New York Times figures most of the money went to financial advisors Goldman Sachs, Lehman Brothers and Moelis & Company. Skadden Arps provided Yahoo with legal advice.

Nearly 1 in 5 Yahoo investors followed Valleywag's voting instructions

There's some kerfuffle about the voting in Yahoo's board election — something to do with whether some large investor voted or not. We don't care! What really pleases us is that the four board members we suggested get the boot — Roy Bostock, Art Kern, Ron Burkle, and Gary Wilson — scored the lowest in the vote. More »

"I think that Yahoo management was pathetic"

Oil billionaire T. Boone Pickens told the San Francisco Chronicle that he's given up on a Yahoo/Microsoft deal, and has sold his shares at an undisclosed loss. But let's be clear: Pickens is not a technology investor. He invested in Yahoo because he believed Carl Icahn had a workable plan, and that chief Yahoo Jerry Yang would make it happen. (Photo by AP/Frank Franklin II)

Yang paves the way for ex-AOL CEO Jon Miller to join Yahoo board

In an entirely punctuated memo posted to Yahoo's corporate blog and the SEC, Yahoo CEO Jerry Yang — or his ghostwriters — declared that yesterday's agreement to give corporate raider Carl Icahn three board seats and avert a proxy fight allows Yahoo "to get back to the business at hand." But while Yahoo will soon enough be able to focus on doing what it does best — losing market share to Google and talent to startups — Yang and the board still have one more task at hand: filling out its expanded board with Icahn-approved nominees. Bet that one of the names will be fired AOL chairman and CEO Jon Miller. Though not included on Icahn's original slate of alternative directors, Yang mentioned Miller by name in his memo as a potential new board member.

Jerry Yang's Olympic dreams

With the Icahn business settled, Jerry Yang can move on to more important questions: For example, is he going to the Beijing Olympics? A week ago, he hadn't quite made up his mind.The dithering was utterly characteristic for the perennially indecisive Yahoo cofounder. But you'd think he could commit to a no-brainer like attending the Games. Yang is a Taiwanese native, and no fan of the Communist regime — China's jailing of a blogger, aided by Yahoo China's handover of email records, led to a humiliating session where he was called to the carpet in front of Congress. But the Beijing Olympics is a seminal event in the rise of Asia, where Yahoo has significant investments — one of the few areas where it has an edge on Google. More »

Proxy fight over: Yahoo gives Icahn three boards seats for his trouble

There will be no proxy fight at Yahoo's annual shareholder meeting this August 1. Today, Yahoo and corporate raider Carl Icahn agreed to end the fight by awarding Icahn three seats on an expanded, 11-member board. Icahn, who owns 5 percent of Yahoo, told the Wall Street Journal he still wants Yahoo to sell — either the whole company or just its search business at the right price — but that "I share the view that Yahoo's valuable collection of assets positions it well to continue expanding its online leadership and enhancing returns to stockholders." More »

Chipper Yang's latest memo: "Hi guys!"

Legg Mason portfolio manager saved Yahoo CEO Jerry Yang's job this morning, and far be it from the always-exclamatory Yang to hide his relief. Yang recorded a companywide video address, and reading a transcript filed with the SEC, we can't help but wonder if Yahoo's lawyers missed a few exclamation marks. "Hi guys," the transcript begins — but we're betting it sounded more like "Hi guys!!!!11!!!!" More »

Why Carl Icahn doesn't have a Yahoo CEO

If corporate raider Carl Icahn ever had any hope of convincing major Yahoo shareholders like Legg Mason's Bill Miller to back his alternative slate against the Yahoo board in a proxy fight, he needed a plan B in case a sale to Microsoft didn't work out. As Kara Swisher puts it, he needed "a solid management team and a cogent plan." For two reasons: One, because without an alternative to a merger with Microsoft, Microsoft would own all the chips in any merger negotiations. Two, by not naming a replacement Yahoo management team, Icahn left major shareholders with the impression that he himself would control the company after winning a proxy fight. Shareholders are unhappy with Yang & Co., but they tell Swisher that "taking such a major step as dumping them and leaving the company in Icahn’s hands — even for a short time he will be there — is decidedly more risky." So if it was so important that he do so, why didn't Icahn ever name a nominee for Yang's job? Because he was caught in a classic Catch-22. More »

Yahoo uses its own front door to battle Icahn

Yahoo has posted a big purple link to its anti-Carl Icahn website on the front door at Yahoo.com, with a rotating set of teasers including an Icahn quote, "It's hard to understand these technology companies." Wow, they're just like bloggers who post the letters lawyers send them! But seriously, by using its reach to deliver its own insidery message to shareholders, Yahoo is finally acting like a mainstream media company. Icahn may find tech companies hard to understand, but he's probably figured this out today: He's fighting in public with an opponent whose daily audience dwarfs CNN and the Wall Street Journal. Here's a closeup: More »

Moneyman Bill Miller saves Jerry Yang's job

Legg Mason portfolio manager Bill Miller controls 4.4 percent of all Yahoo shares and he's formally declared his plans to vote them for CEO Jerry Yang and the current Yahoo board. In a statement, Legg Mason says it doesn't buy corporate raider Carl Icahn's claim that Microsoft would only offer to buy the company again if it could negotiate with a new board. More »

Bostock and Yang's memo: "Carl Icahn-Microsoft alliance will destroy stockholder value"

In a memo filed with the SEC, Yahoo CEO Jerry Yang and Yahoo chairman Roy Bostock made what we can only hope will be their final case to Yahoo shareholders as to why they should vote against Carl Icahn's alternative board at the company's August 1 annual meeting. (While Yang also signed the memo, you can tell Bostock's actually the one who wrote it, because it uses capital letters.) Their key points:

• Yahoo will sell if Microsoft makes a $33 offer.
• Yahoo will sell just its search if Microsoft makes an off ther that "provides real value to our stockholders and resolves the substantial execution and operational risks associated with the separation of our search and display businesses."
• "Mr. Icahn can’t make up his mind about what he thinks will work for Yahoo!" Mostly because he's just in this for a quick buck.
• "Vote your WHITE Proxy Card"

The full memo is below. More »

Bostock: Why can't Microsoft be more like InBev?

Yahoo chairman Roy Bostock says that if Microsoft had handled itself the way InBev did, buying Anheuser-Busch for $52 billion even after A-B rejected an initial offer, Yahoo and Microsoft would probably be one company by now. "InBev was a classic, perfectly managed takeover," said Bostock. More »

Yang and Bostock can't agree on whether to sell Yahoo search

Do Yahoo CEO Jerry Yang and Yahoo chairman Roy Bostock disagree on whether Yahoo should ever sell its search business to Microsoft? Citing several sources, BoomTown's Kara Swisher says she knows what Yahoo CEO Jerry Yang wants, period: More »

Icahn, Microsoft say Bostock twisted facts about weekend negotiations

In a letter to Yahoo shareholders, corporate raider Carl Icahn writes that he's never seen a company "distort, omit and twist" facts quite the way Yahoo did in a statement the company released Saturday night. Yahoo said it had rejected Microsoft's latest offer to buy Yahoo's search business. In the statement, Yahoo said Microsoft made an ultimatum and gave Yahoo only 24 hours to accept or reject the deal. Naturally, Microsoft agrees with Icahn's assement. In a release titled "Microsoft Sets the Record Straight," Microsoft says that it only proposed a new search deal after Yahoo chairman Roy Bostock called Microsoft CEO Steve Ballmer and asked for one. Microsoft says it worked a proposal up by late Friday and sent it, asking Yahoo to confirm in 24 hours whether or not the proposal was "sufficient to form the basis for the parties to engage in negotiations over the weekend on a letter of intent and more detailed term sheets." "This discussion," reads Microsoft's statement, "has been mischaracterized as a take it or leave it ultimatum, rather than a timetable in order to move forward to intensive negotiations." Yeah, we're lost, too. Microsoft's full statement, below. More »

Icahn files replacement Yahoo board slate with SEC

Corporate raider Carl Icahn made his proxy fight for control of the Yahoo board official today, filing an alternative slate with the Securities and Exchange Commission. The slate includes nine of the ten names Icahn already put forward in a letter to Yahoo chairman Roy Bostock. Bob Shaye, former cochairman and co-CEO of the recently defunct New Line Cinema, is no longer on the list. The filing includes a letter from Icahn to Yahoo shareholders in which Icahn urges them to vote for his slate because "Steve" — as in Microsoft CEO Steve Ballmer — told him it would grease the wheels for a deal: "If a new board consisting of my nominees were to be elected,Microsoft would be willing to enter into discussions regarding a transaction immediately." Icahn's proposed slate and its members brief bios, below. More »

Microsoft's latest rejected Yahoo offer worth billions of dollars a year

Reason No. 8347 why we're glad we're not Jerry Yang: We like weekends away from work. Yang never gets them anymore. On Saturday night, Yahoo released a statement letting the world know it rejected yet another Microsoft offer to acquire Yahoo's search business. Kara Swisher reported the terms of that deal today. $2.3 billion a year for outsourcing search — why didn't Microsoft offer that in the first place, without corporate raider Carl Icahn holding a gun to Yang's head? That seems easier. The bullet points, below: More »

Yahoo rejects Microsoft/Icahn bid

From the Wall Street Journal: "Yahoo Inc. disclosed Saturday night that it had received and rejected a joint proposal from Microsoft Corp. and Carl Icahn for a restructuring that the Internet giant said would have included the acquisition of its search business by Microsoft." Kara Swisher at AllThingsD has a longer report with quotes from Yahoo and Microsoft execs that weren't in the official statement.

Jerry Yang talks to Kara Swisher — the end must be near

After avoiding the viciously loquacious Kara Swisher for a year — even at her big tech conference — normally mellow Yahoo founder Jerry Yang gave the AllThingsD reporter an earful. Yang says No Fucking Way will he hand the keys over to the comedy team of Carl Icahn and His Lack of a Plan B (I'm paraphrasing), in part because Yang doesn't trust that Microsoft, for all its talk, will actually buy Yahoo from Icahn. “And then what will shareholders be left with?" Yang fumes. "A weakened, Icahn-controlled Yahoo.” The best possible outcome — we mean for us — will be a deathmatch proxy battle pitting Yang against Icahn at the August 1 shareholder meeting. (Photo by AP/Paul Sakuma)

Is Microsoft after Yahoo's paid-search patent?

Yahoo's board has called Microsoft's on-and-off pursuit of their company "erratic." Not that their behavior's been that straightforward, either. But could there be more to the imbroglio than Jerry Yang's founder ego and Steve Ballmer's desperate grasping at relevance on the Web? Blogger Usman Latif has a theory: It's all about "'361," a patent Yahoo obtained when it bought paid-search pioneer Overture in July 2003. The patent covers the basic business model of letting advertisers bid to place ads against keywords — the heart of Google's multibillion-dollar revenue engine. Latif's thesis: Microsoft doesn't want Yahoo's people, products, or market share; it just wants to get its hands on this patent, so it can use it to knife Google. More »

Yahoo refuses to pay News Corp. $15 billion for MySpace

There's desperate — and then there's "paying $15 billion for second-place has-been social network MySpace" desperate. Not even Yahoo CEO Jerry Yang, under pressure from a mixed-up Microsoft, angry shareholders, and crazy-old-coot corporate raider Carl Icahn to do some kind of deal, is that desperate. Yang is taking so much heat for blowing merger negotiations with Microsoft, botching the company's reorg, and losing top talent that he's probably going to lose his job come August 1, when the company holds an annual shareholder meeting. But despite all that, a source close to the company told Reuters that Yang refused a bailout deal with News Corp. that would have combined Yahoo with MySpace because "News Corp. sought a value of as much as $15 billion for those assets." At long last, we're happy to credit Yang for a smart move! More »

Microsoft not doing much to disprove Yahoo's "confusing and erratic" charge

Wait a minute: Now Microsoft wants to buy Yahoo again, provided the current board gets dumped? We could have sworn we heard Microsoft executives from Steve Ballmer on down talking about how the company had moved on. Right. If this is moving on, then Julia Allison is over Kevin Rose. I'm starting to believe Jerry Yang's version of the deal.

6 reasons why Jerry Yang's wrong about Yahoo

Do we still have to pity Yahoo cofounder Jerry Yang? Or is it, at long last, acceptable to simply hold him in contempt? With Microsoft backing corporate raider Carl Icahn's replacement board of directors, and major investor Gordon Crawford also lining up to support Icahn, Yang's time at the company is coming to an end, and he seems to know it. Yet he's trying to stay on anyway. Like any leader facing certain failure, Yang has begun to indulge in pure make-believe. Here's a short list of Yang's Yahoo fantasies. More »

Yang eyes AOL to save his job

Yahoo CEO Jerry Yang spent the holiday weekend with his company's Goldman Sachs advisers, devising a plan to present shareholders during the company's annual meeting on August 1. The goal: Craft an alternative to a company breakup or buyout at the hands of Microsoft, which would likely come at the cost of the entire Yahoo board's jobs, including Yang's. To escape such a fate, Yang and his bankers zeroed in on Time Warner, hoping to acquire its online property AOL in exchange for $10 billion worth of Yahoo stock. It's an old plan, brought up again last week after first surfacing in April. More »

The Yahoo board members we'd most like to see fired

Corporate greenmailer Carl Icahn, some old dude who was stupid enough to buy a lot of shares of Yahoo on the premise that Microsoft would buy the company after it said it wouldn't, wants four seats on Yahoo's board. Yahoo only prepared to reward his intelligence by offering him two, Kara Swisher reports. Why so stingy? This is a once-in-a-lifetime opportunity to clear the dead wood out of the boardroom. Make room! Our nominees for the axe: More »

Microsoft still pushing Icahn onward in proxy fight

After selling Yahoo entirely to Micosoft, corporate raider Carl Icahn's second choice for Yahoo was for it to outsource search advertising to Google. That happened. And since then, Icahn's been awfully quiet, even as he's putting forward a slate to unseat Yahoo's current board of directors. Is Icahn content to sit back and watch his slate lose? Not according to the Wall Street Journal, which reports that he and Microsoft are still working in cahoots: More »

Carl Icahn finally updates The Icahn Report — powered by Google

No wonder Carl Icahn thinks that Yahoo's search advertising deal with Google has merit — turns out that his blog, The Icahn Report, uses Google to help readers search. Not that there's much content to search, as it just went live today, with an archive only going back a week to June 12. Which just happens to be the day that talks with Microsoft ended and the partnership with Google was announced. One keyword you won't be able to find with a Google-powered search of Icahn's blog? The word "Yahoo."

New Yahoo: Joining up without severance package would be like "running into a burning building"

Silicon Alley Insider turned up a defender of Yahoo CEO Jerry Yang's change-in-control severance package — someone bold enough to join Yahoo in May. (Confused? A tip: Just remember that the phrase "joining Yahoo" is the opposite of the more commonly used phrase "leaving Yahoo.") Critics called the plan, whose cost was estimated at as high as $2.5 billion, a "poison pill," saying it creates incentive for employees to leave the company after an acquisition. More »

Google deal slows activist Yahoo shareholders' momentum

Lawyers for two Yahoo-owning Detroit pension funds saw a Delaware judge deny their request to expedite a shareholder lawsuit against the company. The funds had hoped to speed up the process ahead of Yahoo's annual shareholder meeting that will determine who controls the company's board — Jerry Yang's stooges, or corporate raider Carl Icahn's stooges. As a result of the judge's decision and Yahoo's deal to outsource search advertising to Google, two major Yahoo shareholders now say they will seek a board composed of some of Icahn's selections and some of the current directors. Icahn himself is said to now be merely hopeful he can win "at least some board seats." (Photo by AP/Mark Lennihan)

Fake Jerry Yang responds to the New York Times — the 20-word version

With Fake Steve Jobs on sabbatical, Fake Jerry Yang has picked up the slack to chime in on Joe Nocera's scathing open letter in the New York Times. Shortly before the vulgarities is this little gem, which says more about the New York media landscape than it does about the Microsoft-Yahoo-Google three-way: More »

"Oh Jerry, It’s No Longer Your Baby" — the 100-word version

New York Times columnist Joe Nocera's open letter to Yahoo CEO Jerry Yang over the weekend nicely captured Yahoo shareholders' rage over the whole Microsoft mess. But will they stop fuming long enough to read all 1,500 words? A version they'll be able to finish before their lawyers get done filing the next shareholder lawsuit, and Yang will be able to finish before the next top executive's resignation letter hits his inbox, below. More »

Icahn: Yahoo-Google "might have some merit"

Corporate raider Carl Icahn wanted Yahoo to sell to Microsoft, but after keeping quiet while Yahoo stock tanked last week, he's now making noises that he's okay with the Google deal. He told Reuters: More »

Microsoft, Yahoo confirm talks are dead

Microsoft and Yahoo have released statements confirming reports that merger negotiations are off. In its statement, Microsoft leaves the door open for a partnership that would "ensure healthy competition in the marketplace, providing greater choice and innovation for advertisers, publishers and consumers." Yahoo, however, throws the deadbolt, saying: More »

Icahn takeover would trigger severance plan that he hates

One reason Carl Icahn wants to replace the Yahoo board is so that he can rescind the change-in-control severance package Yahoo CEO Jerry Yang put into place after Microsoft made its offer to acquire the company in February. Yahoo says that if Icahn's slate were to take over the company, that would itself be a "change in control" and would trigger the severance provisions. Given this latest obstacle, Henry Blodget wonders when Icahn will pack up and go home. More »

Yahoo proxy ballots are out; early results are here

Enough with the letters. It's time to vote. On Monday, Yahoo mailed out ballots for its upcoming board election, for which corporate raider Carl Icahn has proposed an alternative slate — one that will do his bidding and attempt to resuscitate merger talks with Microsoft. Yahoo also said it plans to spend $12 million campaigning for its board. Anyone who has owned Yahoo shares since before June 3 is eligible to vote online, via toll-free number or by snail mail. Yahoo will announce the results on August 1 at its annual shareholder meeting. By why wait till then? Review the pros and cons for each side and then vote your Valleywag proxy below. More »

Icahn to Yahoo: "Why did you permit Google to leave you in the dust?"

Buying up billions of dollars in Yahoo shares and calling for a new board and renewed merger negotiations with Microsoft made corporate raider Carl Icahn come off daring and bold, if slightly confused. Now, with his latest later to Yahoo chairman Roy Bostock, Icahn just seems whiny. He begins his letter: More »

Ballmer: "Obviously" Microsoft and Icahn are talking

Publicly, Microsoft, its CEO Steve Ballmer, and its chairman Bill Gates say the company no longer wants to acquire all of Yahoo. Yet corporate raider Carl Icahn continues to wage billions of dollars that a Microsoft-Yahoo merger could still happen. Is Icahn hearing something different from Microsoft than the rest of us? : "Obviously, he has talked to some of our folks," Ballmer told reporters. Icahn issued a nondenial denial when CNBC asked if he's been in communication with Microsoft: "I wouldn't say closely, and I wouldn't want to talk about it anyway, you know?"

Step two in Carl Icahn's five-point Yahoo plan: replace Yang

Corporate raider Carl Icahn laid out a five step plan for Yahoo in a letter to Yahoo chairman Roy Bostock today. In brief, Icahn wants to replace Yahoo's poison pill severance package, usher CEO Jerry Yang back into his role as "Chief Yahoo," tell Microsoft that it can have any of Yahoo unless it owns all of it, sell Yahoo, or failing that outsource search to Google. Find the plan in Icahn's own words, below. More »

Carl Icahn speaks, slowly, on CNBC Fast Money

Billionaire and activist investor Carl Icahn took his Yahoo obsession to the airwaves with a phone-in interview on CNBC's Fast Money yesterday afternoon. In my attempts to distill the over twelve-minute, rambling dialogue with the anchors on the show, the most interesting thing was how guarded and halting Icahn was about his intentions — he revealed little that he, or one of his assistants, hasn't brought up in his many open letters and other lobbying to unseat CEO Jerry Yang, or answer the question "If you succeed in your proxy battle, who says Microsoft will buy?" So with no money quotes to go with, I threw in everything else.

Bostock responds to Icahn

Dear Carl: We are in receipt of your letter of June 4th and take issue with its content. Your letter seriously misrepresents and manipulates the facts regarding the recent events pertaining to Microsoft and Yahoo!. You rely on, as “facts,” a series of unsubstantiated allegations from a complaint filed in a Delaware court which grossly misstate the very clear record and position established by the Yahoo! Board. Let me elaborate: You make reference to our employee retention plan but you significantly mischaracterize its purpose and its effect. In fact, you refer to it as a “Poison Pill” which could not be further from the truth. To set the record straight, the employee retention program is designed to protect the Company’s assets and value during a time of uncertainty. The claim that the plan gives each of Yahoo!’s employees “the right to quit his or her job and pocket generous termination benefits at any time during the two years following a takeover...” is just plain wrong. In fact, our plan has a “double trigger” which means that in order for an employee to be eligible for benefits under our plan, there would need to be a change of control AND the employee would need to be terminated “Without Cause” or resign for “Good Reason.” That means that in contrast to your assertions, an employee who simply quits his or her job would receive nothing under our plan. The retention plan is intended to help us preserve and enhance shareholder value by allowing Yahoo! to continue to attract and retain the industry’s best talent, and to allow employees to stay focused on implementing Yahoo!’s business strategy. In fact, the plan was adopted in order to protect the value of Yahoo! in anticipation of a possible acquisition by Microsoft which would have resulted in a lengthy regulatory review and a significant period of uncertainty for our employees. In adopting this plan, we believe Yahoo! did the right thing for its employees and its shareholders alike. This plan was fully disclosed at the time of its adoption and should be no surprise to anyone at this point. It was disseminated to employees, publicly filed and extensively covered by the media. Significantly, as you note, Microsoft had indicated that it was prepared to spend $1.5 billion on retention incentives indicating that they too recognized that the retention of Yahoo! employees would have been critical if there had been an acquisition. Finally, you significantly misrepresent the events of the recent past. Notably, you accuse us of turning down a $40 per share offer and “sabotaging” a $33 per share offer. Again, this is patently untrue. Yahoo!’s Board of Directors has at all times been focused on maximizing shareholder value. As has been well documented, Yahoo! has engaged in thorough discussions with Microsoft over a series of months culminating in Microsoft’s decision to walk away from a potential acquisition of Yahoo!. Throughout this process, which has included an exploration of multiple strategic alternatives with multiple parties, the Board has repeatedly stated that it is open to any transaction, including a sale to Microsoft, as long as it is in the best interests of shareholders. You seem to be under the impression that somehow Microsoft will come back to the negotiating table for a full acquisition of Yahoo!. This is puzzling as I know you are aware that we have reached out to Microsoft proactively and met with them many times in the last several weeks. During this period, their message to us and to the markets has been and remains that they are not interested in pursuing a full acquisition of Yahoo!. Conspicuously absent from your letter is any credible plan for Yahoo! other than a repetition of your insistence that the Company should sell itself to Microsoft. Indeed, your stated view that “the only way to salvage Yahoo! in the long if not short run is to merge with Microsoft” demonstrates that you have no other plan and causes one to wonder what exactly would happen to our Company if you and your nominees were to take control of Yahoo!. Sincerely, Roy Bostock Chairman of the Board

Why does Icahn believe Microsoft still wants to buy Yahoo?

In a letter responding to corporate raider Carl Icahn's demands that Yahoo rescind a $2.5 billion severance package and restart merger negotiations with Microsoft, Yahoo chairman Roy Bostock writes: More »