Yahoo's Yang warns employees to expect Icahn battle to heat up
With the fight between Yahoo and investor activist Carl Icahn expected to accelerate in the coming weeks leading up to the company's August 1 shareholder meeting, Yahoo CEO and founder Jerry Yang sent an e-mail to employees warning them of the pending mess and offered a Q&A:
Subject: over the weekend -- joint microsoft/carl icahn proposal
yahoos,
on friday evening, our board received a search and restructuring proposal from microsoft and carl icahn. in essence, this proposal would hand over to microsoft yahoo's search business and the rest of the business to carl icahn. our board rejected this for a number of reasons, that boil down to a determination that this deal would be disadvantageous to yahoo stockholders. with our annual meeting quickly approaching on august 1, i want to give you an idea of what to expect over the coming days and weeks.
proposals and attacks by microsoft and carl icahn leading up to our meeting are likely to get even more contentious. i know this could is distracting at the very least. but i know that we can count on all of you to continue to focus on what we do best -- transforming the experiences of our users, advertisers, publishers and developers. i also realize that you, and our customers and partners, may have additional questions. to address these, below is a brief faq that should help.
please be assured that the board, the management team, and i are all focused on doing what's best for the business and our stockholders. we are prepared to let our stockholders, not microsoft and carl icahn, decide what is in their best interests. and we look forward to the upcoming vote at our stockholder meeting. thank you for your hard work and commitment to yahoo.
jerry
Questions and Answers for Employees
Is Yahoo's management now considering selling off search and splitting up the company?
•Microsoft and Carl Icahn made a joint proposal for restructuring Yahoo which included the acquisition of Yahoo's search business by Microsoft.
•Yahoo's Board rejected the proposal, concluding that delivering our search business to Microsoft on terms that would be disadvantageous to Yahoo stockholders does not make sense.
•We remain committed to being a principal in algorithmic and paid search and believe that financial benefits from our announced agreement with Google will allow Yahoo to advance its ability to compete in the convergence of display and search advertising by allowing us to accelerate investment in sponsored search, display and Web search businesses in parallel.
Does Yahoo believe that being a principal in both search and display is the best way to maximize stockholder value?
•We believe that the convergence of search and display is the next major development in the evolution of the rapidly changing online advertising industry.
•Our strategies--including our recently announced agreement with Google--are specifically designed to capitalize on this convergence.
What exactly did Microsoft and Carl Icahn propose to Yahoo?
•Microsoft and Carl Icahn jointly proposed a complex restructuring of Yahoo that would include the acquisition of Yahoo's search business by Microsoft.
•The Microsoft/Icahn proposal would require the immediate replacement of the current Board and removal of the top management team at Yahoo. The Yahoo Board believes these moves would destabilize Yahoo during the up to the one year it would take to gain regulatory approval for this deal.
•Yahoo's Board of Directors determined that accepting the proposal is not in the best interests of its stockholders.
As an employee, what can I do to support Yahoo during this time?
•We ask that you continue to focus on what we do best--transforming the experiences of our users, advertisers, publishers and developers, all while enhancing our leadership position in the online marketplace.
Additional Customer / Partner Questions and Answers
With all the commotion surrounding the Microsoft/Icahn proposal, as a customer/partner--should I be concerned that Yahoo is taking its eye off the ball?
•Yahoo is very focused on continuing to provide its customers and partners with the high-quality level of service and attention that they have come to expect from all Yahoo employees, including management.
•While this public volley can be challenging for everyone, it does nothing to change Yahoo's fundamental commitment to maintaining the highest standards of service.
Is Yahoo's management now considering selling off search and splitting up the company?
•Yahoo's Board rejected the joint Microsoft/Icahn restructuring proposal that would have included the acquisition of its search business by Microsoft.
•Yahoo remains committed to being a principal in algorithmic and paid search and believes that the financial benefits of our announced agreement with Google will allow Yahoo to advance its ability to compete in the convergence of display and search advertising by allowing us to accelerate investment in sponsored search, display, and Web search businesses in parallel.
What exactly did Microsoft and Carl Icahn propose to Yahoo?
•Microsoft and Carl Icahn jointly proposed a complex restructuring of Yahoo that would include the acquisition of Yahoo's search business by Microsoft.
•The Microsoft/Icahn proposal would require the immediate replacement of the current Board and removal of the top management team at Yahoo. The Yahoo Board believes these moves would destabilize Yahoo during the up to the one year it would take to gain regulatory approval for this deal.
•Yahoo's Board of Directors determined that accepting the proposal is not in the best interests of its stockholders.
Dawn Kawamoto covers enterprise security and financial news relating to technology for CNET News. E-mail Dawn. 
The board? They dont do much but say YES or NO. And if anything, that would allow MS to buy and Yahoo stock to take off.
How is that a detriment to the stockholders??
Also?
"As an employee, what can I do to support Yahoo during this time?"
Keep on working as normal - DUH! But of course, please ignore the poisen pill that Yang has give yahoo. If workers want to leave when MS takes over, they can have a really really nice severance package!!!
That would NOT be in support of yahoo owned by MS would it?!
Why hasnt Yang been investigated by the FEDs and thrown in jail yet?
- by twinlord July 14, 2008 7:59 PM PDT
- Arrgster is right.
- Reply to this comment
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(3 Comments)I have to side with Yang. If the deal goes through, it will mean the death of yahoo. It might raise a lot of money for Icahn and the other shareholders now, but, as I see it, Icahn is planning to strip yahoo into pieces and sell it to the highest bider, just like he did in 1985 after his hostile takeover of TWA.
I can foresee the sports portal going to CNN and the great Yahoo Finance going to Forbes, and so on.
I hear Icahn plans to overthrow the current board on August 1st and installing himself in it. What is his take in it? He is no Entrepreneur, he doesn't care for the growth of the enterprise, he just wants to cash in. Otherwise, he would have added in the specifications of the deal what his future plans for the company are and how he planned to make it more profitable.
I wonder right now weather Microsoft and Icahn are really that ruthless that they are willing to take all the benefits and innovation Yahoo brings to users from the Internet community? Why is MS looking for a higher market share with the buy out. They need to promote more their image. That is what they are missing and clearly this is not helping. (off course developing a better product might actually help)
At this point in time I ask myself if Ballmer will ever change his ways, or perhaps it would be better if MS top managers got a small dose of new and innovative blood instead of high paid greedy managers. I am still waiting for that change of path Ballmer was preaching a couple of months ago.
Jerry Yang might not have been the best captain of the Yahoo ship, but I am sure He will keep the company going and improving, while Icahn just wants to make a hole in it and watch it sink while he cashes in on the insurance money.