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It is a bit hard to tell whether Carl Icahn or Jerry Yang has backed down the most in the settlement of the proxy fight between Mr Icahn and Yahoo. But I suspect it means that Microsoft will have to make a full bid for Yahoo if it wants to gain control of its search assets.

I think this is the right conclusion. I have written of my doubts about whether Mr Yang is an appropriate chief executive for Yahoo, it also seems to me that Yahoo should not cede control of search to Microsoft unless the latter offers a premium for control.

True, we don’t know what will happen now that Mr Icahn is joining the Yahoo board along with two members of his slate, and he said in a statement that he still wants a “sale of its search business in the right transaction” if not an outright takeover of Yahoo. But Yahoo has made it pretty clear that it rejects the idea of a search carve-out.

So I reckon that Mr Icahn and Mr Yang will have to co-exist uneasily for a bit while Mr Yang tries to prove that he can revive the business independently. I don’t think that Mr Icahn has the votes or the clout immediately to force a search disposal.

In the longer-term, however, I doubt Mr Yang’s ability to do what he claims he will be able to do with Yahoo. So I expect him eventually to step down as chief executive and simply serve as “Chief Yahoo”. If another company is prepared to come up with the money, Yahoo will then be sold.

I have written a column for the Weekend FT on the crackdown on short-selling on both sides of the Atlantic. I can see the point of trying to curb bear raids on fragile financial institutions but short-sellers generally provide a useful service. You can read it here and comment below.

As trailed, I have written my FT column this week on the F-22 fighter and whether it is worth the money. I conclude that the current US position - to buy a limited number and refuse to sell others to its allies - is militarily questionable and financially crazy. You can read it here and comment below.

Thanks, by the way, to commenters on my earlier post who made some very informed remarks on the subject.

Overheard on the Farnborough to London train:

A group of American defence contractors talking about a contract that was delayed by a glitch. One executive, regretfully, as if it would be the last resort: “We may have to tell the Brits about it.”

Heaven forbid!

Well, that was a first for me. I don’t think I have attended a media briefing on an aircraft before, and certainly not a US Air Force one.

The aircraft in question was a C-130J Super Hercules – one of those big transport aircraft that you see often in war zones, or involved in relief efforts. This one had just returned from a tour in Iraq and has previously operated in Afghanistan.

The beast was on the ground at the Farnborough Air Show but that did not detract from the oddity of sitting on one of the red canvas seats lined along the sides of the aircraft to hear about the aircraft and its deployment.

The rear cargo door was open so, although we were in fact at zero altitude, it felt curiously as if we were about to be tipped out of the back in parachutes.

Continue reading "A brief encounter with a Super Hercules"

Well, the star of the show was certainly the star of the show. In time-honoured tradition, I have just been standing on a balcony at the Farnborough air show, with plugs in my ears,  watching fighter aircraft doing manoevres.

This year’s Farnborough highlight was the F-22, the world’s best - and most expensive - fighter aircraft. It is a stealth fighter made by Lockheed Martin and Boeing, with Pratt and Whitney supplying the engines and the only air force that has them is the US one. Foreign governments are not allowed to buy them.

It does feel odd to be watching the beauty and balletic elegance of fighter jets at air shows, given that their mission in life is to destroy things. In the F-22’s case, it does not do much bombing of ground targets but could beat any other aircraft in a fight.

However, the F-22 is unquestionably stunning to watch. Its most surprising trait, for an aircraft that can travel at Mach 2 and launch missiles at supersonic speed, is that it can come to a virtual halt in the sky.

Continue reading "The world’s best fighter aircraft goes slow"

The United Arab Emirates are becoming the go-too place for western, and particularly US companies, that need a bit of a boost amid financial turmoil.

I am at the Farnborough Air Show today and started my day listening to Scott Carson, the head of Boeing’s commercial aircraft division, making a brave case that his industry would prosper despite high oil prices, environmental pressures etc, delays to Boeing’s new 787 aircraft etc.

However, it was only at the end of the presentation when things definitively perked up. That was when Jim McNerney, Mr Carson’s boss, walked on stage at the media centre with Sheikh Ahmed bin Saeed Al-Maktoum, the son of the former Emir of Dubai, to announce an order for 50 of Boeing’s next-generation 737s.

Continue reading "The favourite customer of Boeing and Airbus"

My FT column this week is about the battle for the control of Yahoo and why I do not think Jerry Yang is the right man to make it into a better company. You can read it here and comment below.

The housing downturn that started in the US now seems to be hitting the UK, where I am at the moment, with a vengeance. It makes me wonder what will happen to all those estate agency branches that throng so many high streets.

I suppose know the answer to that already. Fifteen years ago, I spent a lot of time covering the tribulations of the UK building societies that had bought estate agency chains in the housing expansion of the late 1980s and were lumbered in the early 1990s slump.

Abbey National, for example, sold the Cornerstone estate agency in 1993 for £8m, or £23,000 per branch, which was a tenth of the price it had paid to buy the chain six years earlier. Many other building societies also divested loss-making agencies.

Continue reading "Even estate agents get the blues"

The FT story about Driss Ben-Brahim of Goldman Sachs leaving to join GLG Partners and run an emerging markets fund and other things says something about the balance of power between investment banks and hedge funds.

But what struck me as more intriguing is Mr Ben-Brahim’s nationality - he is half-Moroccan and half-Austrian and was brought up in France. He is thus a perfect example of the polyglot nature of the modern City of London.

Continue reading "Why tennis is like investment banking"