OK, so it’s an old story – around two years old, to be precise.
Still, you have to admit it’s interesting that Icahn wasn’t always as down on Yahoo’s management as he has been this week. At the time, he was putting pressure on Time Warner over its failure to do more with AOL, and pointing to Yahoo as a model of internet success. This is what he told the FT:
“Look at what Terry Semel did at Yahoo. Why has AOL fallen so far behind Yahoo and Google? It is poor management.”
He had something similar to say on CNBC a couple of months later:
“Google, obviously, is one of the great success stories of all time, but Yahoo has done a great job with Terry Semel, who incidentally, they threw out of Time Warner.”
Semel only lasted about a year and a half after that. Icahn may be a great stock market opportunist but he’s obviously no expert on the internet business (something he’s admitted himself.) That’s a good reason why, if he can’t force a quick sale to Microsoft, Yahoo shareholders would probably be better off not electing him to the board of their company.
Update: It looks like Mr Icahn’s intervention has had a remarkably quick result, though not the one he was hoping for.
Microsoft has taken the opportunity to make a new pitch to Yahoo. This time, reading between the lines, it is only trying to buy part of the company, probably its search business.
Mr Icahn is not likely to welcome a deal unless it includes a full Yahoo takeover premium: anything less would probably push the stock down from its current level.
Steve Ballmer has one other complicating factor to consider. At the time he dropped his full takeover offer, he argued that it would be a strategic mistake for Yahoo to shed search. So if this really is the very business Microsoft is now trying to acquire, wouldn’t the Yahoo board be justified in throwing his own words back at him?
A Machiavellian interpretation of Sunday’s events is that Microsoft has nothing to lose from making a partial bid. If it succeeds, fine. And if it all it does is hit Yahoo’s share price, that’s fine too. As Microsoft says in its latest statement, it won’t rule out making a full bid again some time in the future.
