May 18, 2008
Carl Icahn praises Yahoo (Really)
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.
Hey Microsoft, looks like YAHOO is correct with their asking price of $37.00. PAY IT.
Posted by: hd | May 19th, 2008 at 4:26 am | Report this commentGreat comment in seeing through Mr Icahn’s near term opportunistic foray into Yahoo and his inability to comprehend not just Yahoo but the whole tech world- Killed BEA’s creativity. Enabled Motorola to lose its survival possiblity and now Yahoo after failing to get somewhere with AOL through Time Warner? May be SEC should bring about a minimum holding period in a company before engaging in any such activity- It is a shame that after purchasing just 10 million shares ( the remaining is only in options- technically a gambler’s stub) and holding it for a few hours one has the odacity to turn the tide against Yahoo board- that too supporting another law breaker - Microsoft which is still scrambling to stay straight with the EU.
Please MR Icahn stick to your domain and stay out of the tech world - let innovation dictate growth and not intimidation.
Posted by: ColdFriction | May 19th, 2008 at 6:50 am | Report this commentto “coldfriction”, your kind of technogeek arrogance is one of the reasons why the markets need guys like icahn. if you want to have “innovation dictate growth and not intimidation”, why don’t you do it with your own money???
why do you support a management that clearly wasn’t thinking economically, did what it could, IN SUBSTANCE, to blow up the microsoft deal, causing many many billions in losses to THE OWNERS OF THE COMPANY, then points to a bunch of legal, technical procedures and lingo to justify it???
your attitude is no different than the dime a dozen idealists who won’t put their money where their mouth is, but will risk everybody else’s livelihoods for their own agendas.
Posted by: chris | May 19th, 2008 at 8:26 am | Report this commentto “coldfriction”, a few more parting thoughts. not sure if you’ve noticed, but while google’s been doing all kinds of innovative things for the consumer and their own business model, yahoo’s done….what?? other than copying what google’s done, i can’t think of anything of substance that yahoo’s done well or innovated on recently. please tell me where yahoo’s been an innovative leader in anything in the last few years. ANYTHING!??
as for Icahn and his “domain”…calling out badly managed companies that ignore and insult the intelligence of their shareholders while causing billions in losses…THAT is Icahn’s domain.
when you’re playing with other people’s money, it’s part of your job to make sure you keep their confidence and act on their behalf…that is a PRIVILEGE, not a RIGHT. when you lose that faith…you get FIRED.
Posted by: chris | May 19th, 2008 at 8:37 am | Report this comment[…] more on Financial Times or on Carl Icahn’s blog. Rate this: 2.5SHARETHIS.addEntry({ title: “Microsoft renews approach to Yahoo”, url: […]
Posted by: Microsoft renews approach to Yahoo | jmu's blog | May 19th, 2008 at 12:01 pm | Report this commentThere may be another reason that Microsoft is acting now: Google has $250M in cash is locked up in auction rate securities (http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aj21tq8FG9gE). Balmer may see that Google is handcuffed and he’s calling its bluff.
And, BTW, did FaceBook really get such a great team when it nabbed Google’s CFO and COO earlier this year? Why were they chasing yield with auction rates at Google instead of keeping the cash available for action?
Posted by: Keep Digging | May 19th, 2008 at 2:54 pm | Report this commentSep 1998- MSFT : $27.515
May 2008- MSFT : $29.46
apart from a $3 dividend has anyone noticed how ineffective ballmer is. Mr.Icahn while you are it, can you also get rid of Ballmer. All these tech firms are such a waste of investor’s money.
Listening to the directors and senior managers at yahoo is a joke. they should have rightly sold the company at 31..
Posted by: kb | May 19th, 2008 at 11:35 pm | Report this comment