Microsoft, Yahoo, and Icahn Continue to Bicker Long After We All Stopped Caring

Dennis Faas's picture

They're at it again. Earlier this week, Microsoft, Icahn and Yahoo! all released competing statements about recent talks between the three parties. Another endless discussion in an endless fight for corporate control wouldn't rate coverage at this point, but in this case it's interesting to note that Microsoft and Icahn felt they needed to 'set the record straight. ' Did Yahoo! lie or just misinterpret the most recent events? You be the judge.

On July 14, Yahoo released a statement rejecting the most recent offer from Microsoft to obtain the search component of Yahoo's business. According to the statement, Yahoo rejected the deal for the following reasons:

  • Yahoo!'s existing business, including its deal with Google, is worth more and has less complexity and risk than the current Microsoft/Icahn proposal.
  • The Microsoft/Icahn proposal would make it impossible to sell the entire company at a "full and fair price."
  • Yahoo!'s remaining non-search businesses which would be overseen by Mr. Icahn's slate of directors, which has virtually no working knowledge of Yahoo!'s businesses.
  • The Microsoft/Icahn proposal would require the immediate replacement of the current board and removal of the top management team at Yahoo! (Source:

The same day as Yahoo! made these claims, Microsoft released its own statement, where it said that Yahoo!'s chairman Roy Bostock had asked Microsoft CEO Steve Ballmer "to submit a new proposal to Yahoo! for a search-only deal reflecting these terms." (Source:

So, according to Microsoft, Bostock asked for the software company to submit a search-only deal and then rejected that deal because it was a search-only deal. Talk about a mixed message! But we're not done there: activist investor Carl Icahn also weighed in, and according to the billionaire, he did not intend to replace the entire board under the new deal (see #4 above) and even offered to keep Jerry Yang on as CEO. Furthermore, Icahn said that during discussions Yahoo! representatives were obsessed with corporate governance and not the financials of the deal itself. (Source:

It's hard to tell what's going on behind closed doors, and who's version of events are more accurate. But one thing is for sure: as the fight for the future of Yahoo! continues we will see more back-and-forth accusations as both sides ramp up their PR efforts to convince Yahoo! shareholders of their cause. As the saying goes, "hold on! It's going to be a bumpy ride!"

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