Yahoo: We Want You, We Want You Not

A lot of propaganda is thrown around in ugly proxy wars, most of which can be safely ignored. Some of us can't afford to avert our eyes, and every once in a while we see some genuine comedy in them thar missives, like today's SEC filing by Yahoo.

OK -- let's see if we get this. Yahoo is:

• Willing to sell itself for $33 a share (to Microsoft, even).
• Willing to spin off its search business (to Microsoft, even).
• Willing to spin off its Asia business (to Microsoft even).

End of story, right? Isn't that what Microsoft CEO Steve Ballmer was all about? Isn't that was Carl Icahn is all about? So what is wrong with what Yahoo is now calling the "Icahn-Microsoft" alliance, as if it were the Evil Empire instead of a ticket to ride? Does Jerry Yang really think there would be any life for him on campus after Absorption? Anyway, isn't he way overdue for the second, third and fifth startup his internet pioneer peers have been able to get going by being serial entrepreneurs instead of lifers?

We admit, we're finding this a little hard to comprehend. Yahoo balks at $33 a share in May, infuriating Microsoft and prompting Icahn to rush in to try to force a takeover deal in that neighborhood by installing a friendly board at the conveniently-timed summer shareholder meeting. Yahoo says
Icahn is clueless and interested not in Yahoo's potential but only in the short money he can get only by feeding Yahoo to Microsoft.
Microsoft has thrown up its hands, saying that it is still into Yahoo but can't deal with those crazy people running the place.

But, seriously folks, this comes down to a dollar amount everyone seems to be sputtering now and the faith that the Yahoos running the place now won't screw things up intentionally or by natural buffoonery in the 9 to 12 months deals like this need to close. That, and don't let the door hit your ass on the way out are about it. You don't need Henry
Kissinger to close this deal.

Let's take the ball-of-wax proposal, for instance, on the theory that if you can come to terms for the whole enchilada you can more easily sell off parts. In its filing, Yahoo says:

First, we will sell the entire Company to Microsoft for $33 per share or more if Microsoft will negotiate a transaction that delivers certainty of value and certainty of closing

.
*
This is the simplest, most straightforward way to maximize value for you.*

We could just stop reading here because that is exactly what Microsoft and
Icahn have said, more or less. And Yahoo could have stopped writing.
But Yahoo also says this, which is geared only to fend off the assault on the board, and not necessarily benefit to shareholders:

Mr. Icahn has made it clear that his only objective is to sell part or all of Yahoo!
to Microsoft. That fact, combined with his lack of an operating plan going forward,

means that he will have no leverage

to negotiate a fair deal with
Microsoft. He has set himself up for failure.

Leaving aside that all anyone is talking about is a deal with Microsoft: Icahn doesn't do operating plans, but Microsoft does, hence the alliance. More to the point: Some might argue that proposing terms you huffily rejected is the embodiment of setting yourself up for failure. Some might argue that could be seen as, how shall we say it -- weakness and poor leadership.

But we digress. How about putting that rejected offer back on the table by saying that you have reconsidered a very righteous position that you didn't fully appreciate in the first place, or that the guy who rejected it has left to "spend more time with his family"? That's one way you could go. Or ...

Microsoft’s flip flops and inconsistencies over the past five months are so stupefying that one can only conclude that Microsoft was never fully committed to acquiring Yahoo! either because:

Microsoft can’t decide what is and isn’t strategically important to its online business;

or

Microsoft is more interested in destabilizing a key competitor so that it can either enhance its competitive position or buy our highly valuable search business — and the enormously desirable intellectual property associated with it — at a bargain basement price.

Hmmm ... as we recall that "bargain basement price" was ... $33 when Yahoo wanted upwards of
$37. And, right, Ballmer and Gates made an unsolicited bid because they
... weren't serious.

Fortunately this will all be settled on or
About Aug. 1. Until then the shareholders may be fuming but we have to admit, this is sort of fun to watch.