Icahn the bad boy? Turmoil at Yahoo!

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July 18th, 2008 by Geoff

There is great press coverage this month about Yahoo being bought by Google, MSN or even Time Warner's AOL….but the whole saga is turning into a soap opera. As a search and PPC fanatic, this is a very sad situation. The reputation of the founding PPC platform and one of the oldest search engines is being tarnished and kicked around.

What do we make of Karl Icahn and how does he fit into this saga? He sure is the internal thorn in Yahoo’s side, one who is more interested in person gain than the future success of Yahoo. A lot of members on the board have been there a long time and Jerry Yang was the founder along with David Filo. None of them want to see what they have built over 12 years to be destroyed; the decision has to be right for Yahoo, not just themselves personally.

Icahn wrote a letter to each board member about his negotiations with Steve Ballmer, CEO of Microsoft. Within it he claims that Jerry Yang will not have the opportunity to “botch up” any more negotiations with Microsoft again, as he won’t have another opportunity.

There is a flip side to all of this, though. The Yahoo board members get paid $10,000 per week (for what, may I ask?). Icahn makes a fair statement when he says that the board have made some bad decisions in recent years about negotiating deals. Even the direction of the company has been none existence which has seen Google plough ahead in the search market. It is fair to say that the leadership of Eric Schmidt at Google is far superior to Jerry Yang. Jerry Yang may adore his beloved Yahoo but is he the right man to lead them out of this situation, let alone catch Google?

Jerry Yang responded to Icahn’s letter to board members by stating that Icahn is flawed by having no alternative solution. Recent reports claim that Yahoo are willing to sell up for $33 a share, after having rejected a joint bid from Microsoft with Icahn involved. The deal involved the board being desolved. Clearly, Icahn’s letter was not correct and shows he is just eager to get rid of Jerry.

Jerry has 13 days left to make sure the directors at next month’s board meeting agree on his way forward.

One thing is clear, 1st August 2008 is the D-day for Yahoo’s future. Watch this space and God bless Yahoo.

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