Yahoo & Microsoft

Will the twine ever meet?

Not sure what is going on with these two. Apparently the waltz is back on with Carl Icahn once more pushing and prodding ahead (with a bit of help from John Paulson it would seem) in getting a better deal for his holdings. Wait, I meant a better outcome for yahoo’s search advertising revenue.YaSoft mock Logo

Don’t get me wrong, I definitely agree with his motives. Yahoo, as much a pioneer as it once was needs to wake up to its current status. Its market position is declining and quickly at that.

It was surprising, therefore, that Microsoft didn’t force a board change through the last shareholder general meeting. From my understanding, there was scope under the corporation’s bylaws for shareholders to nominate their own board members in a general vote, regardless of their majority or minority holdings. Effectively, Microsoft could have ousted the board in one fell swoop and overridden any board reluctance or resistance. Unfortunately, the deadline for new nominations was March 13, so clearly not a chosen tactic.

I wonder why Redmond decided to go lightly on this one? Maybe concerns on a potential regulator backlash from a hostile approach?

Unfortunately, the options left open for Yahoo appear limited. Without a clear and significant up-tick in their performance, a merger or buyout remains their only likely option… The real question, however, is whether Microsoft will feel more or less generous in front of Yahoo’s future plight?

Background links
The Times article on board by-laws

Recent Bloomberg article

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