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Dear Mr. Icahn:We are in receipt of your letter with regard to your intention to seek control of Yahoo!’s board of directors.
Unfortunately, your letter reflects a significant misunderstanding of the facts about the Microsoft proposal and the diligence with which our board evaluated and responded to that proposal. A fair-minded review of the factual record leads to one conclusion: that Yahoo!’s ten-member board, comprised of nine independent directors along with Yahoo! CEO Jerry Yang, remains the best and most qualified group to maximize value for all Yahoo! stockholders.
Conversely, we do not believe it is in the best interests of Yahoo! stockholders to allow you and your hand-picked nominees to take control of Yahoo! for the express purpose of trying to force a sale of Yahoo! to a formerly interested buyer who has publicly stated that they have moved on.
Yahoo Rebuffs Icahn's Intentions [biz.yahoo.com]
Two things stick out to me.
One, microsoft sure does get a lot of competitive information based on this process. err.
Two, the stockholders outside of the yahoo board seem to have no understanding of the underlying business realities. I think going forward, Yahoo needs to redefine what "success" is and reposition itself based on the reality of the market and competition/google. Search may not be their 'core' business for the advertising revenue model after all is said and done, imo.
Yahoo!’s ten-member board, comprised of nine independent directors along with Yahoo! CEO Jerry Yang, remains the best and most qualified group to maximize value for all Yahoo! stockholders.
Sincerely,
Yahoo's board of Directors who want to keep their jobs.
the stockholders outside of the yahoo board seem to have no understanding of the underlying business realities.
Almost always the case. Shareholders have a short term perspective, while Directors have to maintain a long term perspective.
Two, the stockholders outside of the yahoo board seem to have no understanding of the underlying business realities.
No, I think Mr. Icahn has a very good understanding of the business realities. In fact, everyone realizes Yahoo is a sinking ship. Google is cheering because there is one less competitor out there - Yahoo. If you think they just beat MS, with this move, you're sadly mistaken. Microsoft will still be around when people of saying "What was a Yahoo?"
Ron Burkle, finance guy and Bill Clinton pal. Burkle's an expert in supermarkets and other things, as well as board member of Occidental Petroleum Corp. What does he bring to the party, knowledge about coal reserves? I doubt he can even use email...Vyomesh Joshi, a VP at Hewlett-Packard Co. Are you kidding me? He's from the printing division. What's Yahoo got to do with that?...
Gary Wilson, another board member from Northwest Airlines. Yeah, that makes sense. I smell a drinking club!
Read the article and it will help you understand part of what makes Yahoo so out of touch, despite having so many talented employees.
Then Dvorak rips into Icahn's choices:
...If these guys get on the board, they will first try to package a deal for Microsoft and walk away with more money. If they cannot do that, they... will immediately parcel out and sell off the company piece by piece until Yahoo is dead. Looking at the bios of these guys tells you this is something they can do.
They turned down the Microsoft offer because Yang wanted them to. The idea that the board represents shareholder interests is just so much PR silliness.
Shareholders only get to vote on the directors put forth to them.... by management. It takes the financial resources of a Carl Icahn to have any hope of a proxy fight that can replace management boards with shareholder boards.
Icahn is the hero working to maximize shareholder value here, but for whatever reason will be cast as the villain.
