A question for Carl Icahn on behalf of shareholders in Yahoo! Inc. [
YHOO]: What are you doing about the company's inept management? Like another certain rabble-rouser who campaigned on a message of change, you
joined Yahoo!'s board in August pledging to shake things up. As you cogently
stated earlier this summer, "Our company is on a precipice and our board seems ready to take the risk of seeing it topple - ARE YOU, THE REAL OWNERS OF YAHOO!, WILLING TO TAKE THE SAME RISK?" [capital letters yours]
Yahoo! has never seemed so close to the ledge as it does
now. The company's gambit of linking with Google Inc. [
GOOG], the cornerstone of Yahoo!'s turnaround strategy, has failed. The companies have so
vivisected their proposed advertising alliance that, even if federal antitrust enforcers
approve the deal, (which looks unlikely), it can't possibly lift Yahoo! out of its hole, let alone deliver the $250 million to $450 million in operating cash flow that the company
claimed it would.
I'm directing the question at you and your associates on the board, rather than Yahoo! chairman Roy Bostock, CEO Jerry Yang and president Susan Decker, because their blundering in recent years has caused shareholders to lose faith in them, as reflected in the company's falling stock price. After being named to join Yahoo!'s board, you also claimed in July to be "
very encouraged" by your discussions with Bostock and Yang. You even dismissed concerns that you and your board allies, as a minority contingent on the panel, wouldn't have the muscle to turn things around, saying, "From prior proxy contest experience, I have discovered that a minority
position on the board can be also quite effective."
Prove it. Beyond layoffs, what's your plan for reviving Yahoo!? I say "reviving" because maximizing shareholder value by selling the company to Microsoft Corp. [
MSFT] or another buyer, your stated aim before joining Yahoo!'s board, no longer seems on the table. At least not at a price that remotely approaches the $33 a share, or $47.5 billion, that the software maker once offered. Meanwhile, Yahoo!'s market value looks ever more fragile as the company's strategic options vaporize in the post-financial crisis flames. Since you formally joined the board on Aug. 1, Yahoo! shares have fallen 33%.
A move by federal antitrust enforcers to block the ad partnership with Google would clearly do further damage to Yahoo!. More important, it would urgently demand some explanation from Yahoo! leaders--that means you--about what they plan to do. You tout yourself as a champion of effective corporate governance. Time to govern
--Alain Sherter See Nov. 4 post on the Yahoo!-Google ad alliance from Tech ConfidentialSee July 22 post on Carl Icahn's joining Yahoo!'s board from Tech Confidential
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