BLOGS
The Channel Wire
July 07, 2008
Carl Icahn wrote an open letter this week letting Yahoo stock holders know that he has been holding conversations with Microsoft CEO Steve Ballmer about a possible purchase. Icahn goes on to note in his letter that the current board of Yahoo is poorly equipped to manage the company and guide them through the process of purchase. Microsoft released a statement of its own advancing its desire to "work with" a new board at Yahoo.

Both Icahn and Microsoft state they are willing to work toward an agreement that would net the Redmond-based computer giant either the 'Search' capabilities of Yahoo or the whole company. A transaction for either is being backed by the promise that "a very large amount of capital would be due at closing."

The sticking point for the transaction to occur seems to be the current board. In his letter to shareholders, Icahn believes that the Yahoo's board is mismanaging the company.

Writing about the responsibility of completing a 9- to 12-month process of making the purchase, Icahn believes that Jerry Yang and the Yahoo board have already "botched up" negotiations with Microsoft.

"But one thing is clear -- Jerry Yang and the current board of Yahoo! will not be able to "botch up" a negotiation with Microsoft again, simply because they will not have the opportunity," Icahn wrote.

Microsoft also points clearly to the resistance of Yahoo's board of directors, believing that the two companies cannot negotiate while the current team is in place. However, interest in purchasing a part or the entirety of Yahoo has not dwindled.

"While of course there can be no assurance of a future transaction, we will be prepared to enter into discussions immediately after Yahoo!'s shareholder meeting if a new board is elected."

Icahn then advocates his election to the board to move the company in a different direction -- a direction that, he believes, will work with Microsoft while maintaining fiscal responsibility for Yahoo's shareholders and increasing the company's market share.

Posted by Brian Kraemer at 1:08 PM
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