Adios, Amateur Hour. The Big Dog marks his turf

Jerry Yang was able to rope-a-dope Steve Ballmer. But he's never had to square off against a royal pain in the ass like Carl Icahn.

This afternoon, Icahn, a billionaire with a God complex--or is that repetitive?--wrote a new chapter in this deliciously goofy Microhoo saga when he launched plans for a proxy contest to challenge Yahoo's famously feckless board of directors with his own handpicked nominees.

Talk about jumping out of the frying pan into the fire.

The problem for Yang is that he's over-matched. We're talking about a geek going up against one of the most brilliant, cold-hearted bastards this side of T. Boone Pickens (and I meant that as a compliment.) Icahn basically wrote the book on greenmail when he was squeezing sundry CEO testicles as a corporate raider in the 1980s. An abbreviated list of corporations he's had his way with include Trans World Airlines, B.F. Goodrich, Phillips Petroleum, US Steel, Texaco, Goodrich-Uniroyal, RJR Nabisco, General Motors--and more recently--Time-Warner.

Yo Jerry, I can take down Gordon Gekko with one hand tied behind my back

(Credit: The Icahn Report)

In a recent profile, Fortune labeled Icahn "The Hottest Investor in America." Aside from the typically Madison Avenue hyperbole, the description is apt. Icahn, who has a brilliant knack for uncovering undervalued companies, has an important ally in this looming proxy fight: the timing's all in his favor.

After infuriating investors by walking away from the sure payday that Ballmer put on the table, Yahoo doesn't have any options (And no, neither Google nor Time Warner is going to play white knight with a surprise buyout bid.) Yang may be true to his word about having a long-term rescue plan, but that's not helping Wall Street's bad mood. Whatever the truth, Yang was portrayed during the Microsoft negotiations as a passive-aggressive ditherer who queered a good thing. A bit harsh, perhaps, but a lot of paper profits when Microsoft withdrew its offer.

In a perfect world, Yahoo's fate would be placed in the hands of technologists, win, lose, or draw. Let the best ideas flourish and to the victors go the spoils and all of that. In the real world, though, finance capitalism trumps all. If he doesn't already realize it, Yang will soon: Now he's up against the Big Dog.

[gggg sssss]

We live in interesting times. If it is a public company you are running, then the shareholders come first, second and third. Any feel good mantel can only be there to bolster 1, 2 and 3. At least Yang will retire richer than he ever had expected.

[Penguinisto]

I kind of figured someone would wait until MSFT got kicked to the curb to make their own move... OTOH, I don't think Icahn is going to be the big bad boogeyman that everyone paints him as. He may win, sure - but it'll probably cost him a lot to do it (as much as, if not more than what MSFT had on offer). Good luck with that, etc...

[john55440]

This is going to be *very* interesting.

[aintnorainbowdorothy]

So let Icahn do his thing an get rid of Yang. As for his slate of drectors, I noticed an extremely interesting person. The one and only Mark Cuban. Wonder if Cuban would become CEO? Now talk about interesting.