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No, Really, You Cahn’t: Icahn & Yahoo Letters, Round 2

Things are going from bad to worse between Yahoo and Carl Icahn. In Round 2 of letters this week, Yahoo and Icahn repeat many of the same arguments, but they’re really getting snippy now.

Sigh. I’m getting too tired of the ugliness to try to wade through and pluck out the “good” parts, but here’s the gist of the interchange:

ICAHN: Liar, liar, pants on fire. The employee “retention” plan is a walkout and a poison pill; sell to Microsoft for $34.375/share or I’ll do it myself.

YAHOO: Nuh uh, you’re the liar. Why should we be the ones to come crawling back to them, anyway?

If you want to read the full texts of the letters yourself, don’t say I didn’t warn you. (Oh, and Yahoo’s letter is shorter.)

Yahoo’s Yang to Yings – Thar She Blows!

By Sean Maguire

Jerry Yang must be thinking “surely this is a bad dream”, as he runs around like Captain Ahab (as best he can since he’s also standing on one leg), shouting out commands as the Great White Whale charges the ship.

Yesterday, Yang completed a rare “three-peat” in a letter to his underlings (yings):

One for the money

“I’d ask all of you to stay focused on the business at hand and what we do best — transforming the experiences of our users, advertisers, publishers and developers, all while enhancing our leadership position in the online marketplace.

Two for the show

“In the meantime, we should remain focused on doing what we do best — transforming the experiences of our users, advertisers, publishers and developers, all while enhancing our leadership position in the online marketplace.

Icahn’s Not the Only One: Bartz Selling Yahoo Stock

icahnCarl Icahn’s recent Yahoo stock dump didn’t cause too much alarm—although he took a $125M loss, he still retains 4.5% of the company (and his board seats). But now Yahoo CEO Carol Bartz looks like she’s dumping stocks—and investors are none too happy.

As The Guardian reports, when Carol Bartz took the helm, she was given a $1M salary and $5M in stock options, as well as a promise of a $4M bonus if things went well. In two sales during these last nine months, Bartz has already unloaded $2M in Yahoo stock options.

Not exactly a sign of confidence. Yahoo’s general counsel, Mark Callahan, has also sold of a significant portion of his shares—$1.35M in five sales this year, twice as much as last year. Because bad things come in threes, I guess.

Yahoo: Make Us an Offer (We Won’t Refuse)

the young and the profitlessSuddenly, I feel like I work for Soap Digest. But with the latest don’t-miss developments in The Young and the Profitless, we had to get a jump start on Season Two!

Last time, on The Young and the Profitless:

Despite Stacey’s (YHOO) recent marriage to Grant (GOOG; last season), Brad (MSFT) has decided he’s going to win her back, with or without her consent.

Meanwhile, Grant’s and Stacey’s marriage is really one of convenience to provide financial support for Stacey When faced with Brad’s emotional assault, Stacey turns to Tim (Time Warner) for help—but Brad has been trying to get Tim on his side to help woo Stacey once and for all. Who will win Stacey’s heart and search business?

Yahoo Still Fighting the Good Fight

I knew you were wondering, since none of us are sure these days, but Yahoo is still giving it the old college try. Here’s the latest from the Yahoo battlefront.

Although a few of our commentators insist that the Yahoo/Microsoft deal is all but inevitable, Rupert Murdoch disagrees. And I think he might know—after all, his properties, especially News Corp, have been courted by both sides almost since the beginning for support in brokering and/or funding a deal.

Murdoch said at the Allen & Co conference:

There won’t be a deal. There’s bad personal feelings. In six months, (Microsoft) will walk away.

Ouch.

Google’s AOL Investment a Likely New Strategy for Partnerships

Take a look at BusinessWeek’s fascinating summary of the events that led up to the Google/AOL deal.

It’s interesting to note that while billionaire Time Warner investor Carl Icahn is calling the Google deal a bad thing for those looking to see AOL broken-up and sold, he was the one pushing for the deal instead of one with Microsoft.

Microsoft and Time Warner had been discussing a joint venture that would have tethered the companies’ fortunes more deeply. Had that deal gone through, it would have been harder to peel AOL away from its parent. Icahn was pushing Time Warner in the direction of Google, according to a person close to the discussions. By the morning of Dec. 16, Time Warner execs notified their Microsoft counterparts that they were entering exclusive talks with Google.

Yahoo Reduces Severance Plan “Poison Pill”

Just a day after their massive layoffs began, Yahoo’s in the news again—and again, it’s not really the kind of story you want about your company. This time, Yahoo has reduced their severance stipulation for a merger or takeover, removing a possible barrier to acquisition.

According to the AP, the new plan will make it significantly more difficult for any employees laid off after a merger to receive the generous severance packages that were guaranteed to all of its then-14,000 employees while Microsoft was vying for the company:

Yahoo agreed to revisions that will make it more difficult for employees to qualify for severance pay after a takeover. The changes also limit the eligibility period to the first year following a sale and allows the board to scrap the plan entirely—an option that wasn’t available under the original terms.