June 6, 2008 11:00 AM PDT
Week in review: Yahoo's bitter pill for Icahn
Should his dissident slate of directors gain control of Yahoo's board, Icahn plans to seek the ouster of Yang as the company's chief executive. Icahn apparently is irate over newly released details from a shareholders lawsuit unsealed Monday that show the lengths to which Yahoo went to create a compensation program that critics say was aimed at making a takeover bid more costly.
But Jerry Yang wouldn't be banished from Yahoo, should Icahn's dissident slate succeed in unseating Yahoo's current board at the August 1 shareholders meeting. Icahn is willing to let Yang hold onto his employee identification key as "chief Yahoo," though his current CEO title would have to go, according to a letter Icahn sent to company Chairman Roy Bostock on Friday.
Also Friday, making his first public statement on a specific purchase price for Yahoo, Icahn told Bostock to offer up Yahoo to Microsoft for $34.375 a share. That letter is one of several Icahn has sent to Yahoo since launching his proxy fight.
The company issued a response Friday to Icahn's latest letter: "His suggestion that we put out a price publicly to see if Microsoft will alter its stated position is ill-advised. As we have stated numerous times publicly and privately, we are open to any transaction including a sale to Microsoft if it is in the best interests of shareholders."
Yahoo had sought to keep the details of the shareholders suit from being made public, but a Delaware Chancery Court judge unsealed the information on Monday.
Among the juicy details is the revelation that Microsoft proposed buying Yahoo in January 2007, it was willing to pay "about $40 per share," according to the suit. The suit charges that Yahoo's directors breached their fiduciary duties by their actions, including failing to negotiate a deal with Microsoft and enacting the compensation plan. It seeks invalidation of the compensation program as well as an injunction barring the directors from engaging in actions contrary to increasing shareholder value.
In the amended lawsuit by two Detroit retirement funds, Yang is portrayed as the architect of a controversial employee severance program, which would be triggered if Yahoo undergoes a change in control.
Under Yahoo's employee severance plans, full-time employees are eligible for severance if they are terminated, wish to resign for a "good" reason, or have their jobs and duties substantially changed within two years after Yahoo undergoes a change in control.
That could prove to be a hurdle to Icahn's efforts to get his slate elected, in essence by potentially punishing any investor who votes to remove Yahoo's current board. The severance plans, if triggered, could cost Yahoo up to $2.13 billion in potential severance payouts.
On Wednesday, in a letter sent Bostock, Icahn called on Yahoo's board of directors to rescind the company's controversial employee severance plans, fearing it was an impediment to a Microsoft buyout deal.
Apple CEO Steve Jobs will take the stage in San Francisco on Monday to address a gathering of Apple's developers and the media. This year's WWDC is sold out to the development community, who will be hearing formal presentations by Apple on both Mac and iPhone development during the week's sessions and meetings.
Anyone with even a passing interest in consumer electronics is probably aware that Apple is expected to unveil the next generation of the iPhone in the near future. Apple is expected to include GPS technology inside the latest version, another development that could pique the software development community's interest in the iPhone.
A source at a software company that has been working on a native iPhone application tells us the company is getting ready to launch that application on Monday, which could also imply that Apple's App Store will be up and running that day.
Apple is also expected to provide developers with an early version of Mac OS X 10.6 during the conference. The new OS is also rumored to be Intel-only. Users of older Macs running PowerPC chips were able to upgrade to Leopard, but this would mean that Apple will drop PowerPC support with the next release.
Another part of the presentation could involve Apple's .Mac service. One interesting thing to watch for concerning any new version of .Mac is how much of the service Apple keeps in-house, as opposed to bringing a Web-savvy partner like Google into the mix.
News.com will have a live blog up and running during the keynote, which is expected to run from about 10 a.m. PDT on Monday to about 11:30 a.m., so make sure to come back and read about what's actually rolled out, as it happens.
On the green
Car battery company EnerDel predicts that consumers will start getting a two-year payback on hybrid electric cars, once a new generation of batteries is mass-produced. The chairman of parent company Ener1 said lithium ion batteries in development will bring costs down substantially.
He said EnerDel intends to have a manufacturing line operating in 2010 that is capable of making 300,000 car batteries a year for hybrid electric vehicles that run partially on a battery and partially on an internal combustion engine.
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