Carl Icahn joined the Board of Directors at Yahoo! Inc. (NASDAQ:YHOO) in July 2008. This was shortly after Icahn highly criticized the Yahoo! Board of Directors for their negligence in making an acquisition agreement with Microsoft Corporation (NASDAQ:MSFT). Icahn bought and sold many Yahoo! shares ever since.

The reason why Icahn is leaving the Yahoo! Board of Directors is because he wanted to spend more time on other investments he made. “I don’t believe that it is necessary at this time to have an activist on the board of Yahoo and currently my attention is focused on other matters,” stated Icahn. Carol Bartz is “doing a great job” added Icahn.

Yahoo! and Microsoft recently struck a deal too. Microsoft Corporation’s Bing.com search engine will power Yahoo!’s various online properties including the homepage Yahoo.com. The deal is still under the regulatory approval process. Icahn owns 4.5% in Yahoo! financially based on stock.

Yahoo Inc. (NASDAQ:YHOO) board member Carl Icahn has unloaded 12.7 million Yahoo! shares.  Now his ownership in Yahoo! went from 5.4% to 4.5%. Icahn said he was taking advantage of a window period where directors and officers can sell shares.

The sale of the shares are not intended to reflect upon the long-term views Icahn has of the company.  He said he was optimistic about the company’s prospects according to a filing.  Icahn continues to support the Microsoft and Yahoo! deal along with the performance of Carol Bartz.

Supposedly Bartz was angry with Icahn for selling the 12.7 million shares and sent out a company e-mail.  In the e-mail, Bartz tells Yahoo! employees to “get out of the sugar low – we have work to do. Stop staring at our navels, stop arguing with each other. Stop debate, debate, debate, and let’s focus on the competition.”

It was about a year ago that Carl Icahn was battling the Yahoo! Board to have several executives removed from the helm.  But Yahoo! quickly settled before the annual shareholder meeting and gave Carl Icahn three board seats.

As you may remember, Carl Icahn was highly proactive in pushing Microsoft to work out some sort of deal with Yahoo! if not a full buy out.  Icahn helped make it happen because Microsoft and Yahoo! did end up making a deal.

“I think it is an excellent deal, and Yahoo CEO Carol Bartz and her team did an excellent job under the circumstances,” stated Icahn in an interview with BusinessWeek. “I agree with [Microsoft CEO Steve] Ballmer that the deal benefits Yahoo in that Yahoo gets 88% of the search revenues under the agreement,”

Like Steve Ballmer, Icahn said that he was also surprised by Wall Street’s reaction to the deal.  Yahoo! lost about a $2.9 billion market cap and Microsoft gained about the same.

Icahn has a 5% stake in Yahoo!  Icahn added that Yahoo! cannot afford to continue competing against Google and Microsoft the way that they were operating.  “I believe that the partnership with Microsoft bodes very well for Yahoo’s long-term outlook and future,” added Icahn.

Microsoft Corporation (NASDAQ:MSFT) and Yahoo! Inc. (NASDAQ:YHOO) are supposedly in talks once again.  Microsoft is rumored to be wanting to buy out Yahoo!’s online search business for $20 billion.  The acquisition would bring a Microsoft management team to take control of Yahoo!  Jonathan Miller, former AOL CEO is believed to be brought on the combined management team.

Carl Icahn recently bought an additional 7 million shares of Yahoo! this past week which indicates that something big may be happening soon.  Jerry Yang also recently stepped down from the CEO position and is searching for a replacement.

Microsoft would setup a $5 billion facility for Miller and Ross Levinsohn, former President of FOX Interactive Media to run Yahoo!  These two would also raise an additional $5 billion from external investors.  Microsoft would have operating control of the search business for 10 years.  Microsoft would also be given a two-year call option to buy Yahoo!’s search business for $20 billion.  Yahoo! would be left with it’s e-mail, messaging, and content services.

[Source: Times Online UK]

Carl Icahn, board member of Yahoo! Inc. (NASDAQ:YHOO) has decided to buy millions of additional share in the search engine company.  Now Carl Icahn owns 75.6 million shares.  According to paidContent, Icahn “acquired 3,697,181 shares at $9.7988 per share Monday, 2,704,780 shares at $9.9678 Tuesday, and another 376,843 shares at $9.9988 Wednesday.”  Icahn now owns 5.5% of Yahoo!

Three Possible Reasons Why:
Why would Icahn buy so many shares when so many people are wanting to cash out as Yahoo!’s stock is steadily declining?  AllThingsD believes that the investment may be related to an upcoming CEO selection that Icahn favors.

Another theory is that Icahn believes in the long-term prospects of the search engine company.  Even without a Microsoft acquisition and a Google partnership, Yahoo! could still turn around.  Icahn is still on a quest to strike some sort of deal with Microsoft even if it is a search engine partnership.  Yahoo! has been through a lot of downs this year, perhaps we’ll see them become more aggressive.

And then of course there is the basic rule of finance: Buy low, sell high.  Icahn bought all of the additional shares at under $10.  When Microsoft made the bid to acquire Yahoo! earlier this year, the stock jumped up to nearly $30.  Today Yahoo! closed at around $11.51 so the investment is already starting to pay-off.

Google Inc. (NASDAQ:GOOG) and Yahoo! Inc. (NASDAQ:YHOO) was rumored to be dropping the advertising deal altogether, but today’s news says otherwise.  The two search engine companies have submitted a revised agreement to the Justice Department that indicates Yahoo! would limit the revenue earned by the advertising partnership.  The deal also caps the number of years that the two companies would partner with each other.

Yahoo! is depending heavily on the Justice Department’s approval of the deal.  Yahoo! turned down a $47 billion acquisition check from Microsoft Corporation (NASDAQ:MSFT) to accept the Google advertising partnership deal.  Carl Icahn, a board member and investor in Yahoo! reiterated his stance on the importance of working out a deal with Microsoft on CNBC this past Monday.

Yahoo! recently hired Jeff Dossett, former Executive Producer & General Manager at MSN media network to run their own flagship sites Yahoo! News, Yahoo! Finance, and Yahoo! Sports.  

Another reason why this deal is important is because Yahoo! recently announced they are slashing 10% of their workforce.  If the Google deal does not go through, that would not be good for company morale.

When Yahoo! Inc. (NASDAQ:YHOO) had their 2008 Annual Meeting of Stockholders on August 1, 2008, their stock was trading at about $19.80 per share.  At the conclusion of the meeting of the stockholders, it was decided that all of the board members would remain seated.  Carl Icahn, Frank Biondi, and John Chapple joined the Yahoo! Board out of a proxy settlement.  Capital Research called for a vote recount after the meeting and Eric Jackson pointed out that the vote count was controversial. 

Nothing had changed with Yahoo!’s Board of Directors since then.  However, two major events have ignited in the last week. 

The first event is that Yahoo!’s stock dropped to below $13 this past week.  After seeing this happen, Mithras Capital made a request to have Microsoft make an offer to buy-out Yahoo! at $22 per share.  This is $9 per share less than Microsoft’s original offer.  In response to the stock hitting this low, former major Yahoo! shareholder Eric Jackson sold all his hedge fund’s shares in Yahoo!

“I sold my YHOO stake, which I held through my hedge fund last month when it hit $20,” stated Jackson. “I still own a small amount personally. I had no idea idea it would fall this much but I finally decided to stop pushing a rope by calling for change from the inside [as a shareholder]. I voted with my feet. This board has the blood of its shareholders on its hands, and I hope they wear that scarlet letter stigma for a long time.”

Jackson was very proactive in having Terry Semel fired from the company.  Jackson also interrogated the current Yahoo! board at the 2008 Annual Meeting of Stockholders. 

The second major event that took place this week is that Capital Research upped the amount of ownership that they have in Yahoo!  Capital Research owned 8.6% and now they own 10.1%.  It is slightly peculiar that a company that wanted to have a recount for the renomination of the Yahoo! board increase their investment. 

This seems just as odd as the Carl Icahn twist.  First Carl Icahn accused that Jerry Yang a real-life self-destructive doomsday device for his company, then after joining the board Icahn stated that it was the beginning of a beautiful friendship.

Carl Icahn, John Chapple, and Frank Biondi had their first meeting as new Yahoo! Board members this past Monday.  What happened after the meeting?  A rumor that Yahoo! Inc. (NASDAQ:YHOO) may buy AOL from Time Warner Inc. (NYSE:TWX) for $5-$8 billion.  This time Yahoo! propositions “are more serious than has been reported” according to AllThingsD.

Time Warner CEO Jeff Bewkes stated that the future of AOL may be decided soon.  While the rumor is that Yahoo! is offering $5-$8 billion, Time Warner seems to be pushing for $10 billion.  This isn’t the first time this year that Yahoo! was forced to play the negotiation game.

Yahoo! did this same dance with Microsoft Corporation (NASDAQ:MSFT) in February.  Yahoo! wanted over $44.6 billion to be acquired by the software giant, which ended the talks between them a couple of months ago.  AllThingsD also pointed out that AOL doesn’t really have the best bargaining chips when it comes to make a deal happen.  AOL has been bouncing around with Compuserve, Netscape, and Time Warner and the best things have not come out of those deals.

To make things even more interesting Carl Icahn went on CNBC’s Fast Money on Friday, September 19 and stated that he thinks if Yahoo! doesn’t do something with Microsoft, Google will kill them.  Both Yahoo! and AOL are in a vulnerable position.  This is also why Yahoo! has enlisted Bain & Company to help them cut costs.

Below is the e-mail that Jerry Yang about the hiring of Bain:

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Yahoo Inc. (NASDAQ:YHOO) has a new Board of Directors which includes Carl Icahn, Frank Biondi, and John Chapple.  This week, the new boad will be meeting for the first time to plan a new outlook for the company.  There will be a board dinner on Monday night and a meeting the next day.  It is currently unknown whether Icahn will show up to the first meeting. 

As you may remember, major Yahoo! shareholder Carl Icahn pushed for a slate of a new Board of Directors for the Internet company after the Microsoft acquisition bid was rejected multiple times.  Icahn, Biondi, and Chapple were added to the Board as part of the settlement to call off the proxy war.  Biondi is former CEO of Viacom Inc. and Chapple is the former CEO of Nextel Partners. 

Several topics of discussion will include a potential merger with AOL, the advertising partnership with Google Inc. (NASDAQ:GOOG), regulatory issues, etc.  Anti-trust regulators are currently reviewing the Yahoo! and Google deal, but Eric Schmidt stated that he is ready to get the ball rolling this October.

Yahoo Inc. (NASDAQ:YHOO) is not looking good on Wall St. The stock is trading at $17.75 per share right now and now their market cap is at less than $25 billion. Google’s market cap is close to 6 times that amount. The last time Yahoo! was trading for around $17 was around September 2003.

Over the last 9 months, Yahoo! has been facing pressure from shareholders are they constantly refused an acquisition deal from Microsoft Corporation (NASDAQ:MSFT). The only outcome from this decision was that Yahoo! plans to outsource their advertising to Google Inc. (NASDAQ:GOOG) and Carl Icahn joined Yahoo!’s Board. Microsoft’s acquisition offer was $47.5 billion, or about double of Yahoo!’s current value.

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Frank Biondi [Picture Credit: MWD]          John Chapple [Picture Credit: InfoTechLeaders]

As part of the agreement that Yahoo Inc. (NASDAQ:YHOO) made with Carl Icahn, two board members of his choice will be appointed to Yahoo!’s Board of Directors.  According to a source at Reuters, Viacom Inc.’s former CEO, Frank Biondi and Nextel Partners former CEO, John Chapple will be joining the Yahoo! board.

Appointing these board members are not 100% certain, but is pretty likely.  Yahoo! and Carl Icahn settled several days before the August 1st annual Yahoo! shareholder meeting. 

At one point, Yahoo! attempted to hire former AOL CEO Jonathan Miller.  But Time Warner stepped in and stopped Yahoo! from making an offer because of a non-compete pact.

In the last 8 months, Yahoo! Inc. (NASDAQ:YHOO) has had to deal with Microsoft Corporation (NASDAQ:MSFT) and Carl Icahn.  A lot of time and money has been spent figuring out a solution to Microsoft’s unsolicited bid.  Coming up with a solution required spending time with banks and lawyers.

In a filing with the S.E.C., Yahoo! stated that $36 million was spent in the first two quarters of 2008 to hire outside advisers in dealing with Icahn and Microsoft.  A good amount of that cost was most likely paid to Moelis & Company, Goldman Sachs Group, Inc. (NYSE:GS), and Lehman Brothers Holdings Inc. (NYSE:LEH).  Skadden Arps Slate Meagher & Flom was Yahoo!’s team of legal eagles.

According to The New York Times DealBook, the $36 million does not include the fees charged for the 2008 Annual Shareholders meeting on August 1 where Yahoo!’s board persuaded shareholders to vote for keeping the current board.  The $36 million also does not include the “sunk time” and “pure distraction” spent dealing with the situation.

Related Links:
1. paidContent
2. Yahoo! 10-Q filing via SEC

Carl Icahn, the 46th richest man in the world has made an interesting hire.  Icahn has hired Dane Hamilton, a hedge fund reporter from Thomson Reuters to manage his blog, The Icahn Report.  Hamilton will be publishing data regarding Icahn’s opinions on corporate America. 

When Icahn was nominating his own slate of directors for Yahoo!’s Board of Directors, Icahn communicated regularly on his blog regarding why he was doing so.  Hamilton has been writing for the last seven years about hedge funds and even about Icahn.  Hamilton recently published an article from Reuters called Icahn says Yahoo-Google ad deal has merit.

Carl Icahn grew up in Brooklyn, New York, dropped out of medical school, joined the army, then went back to NYC to work on Wall Street.  Icahn & Co. Inc. started in 1968.  Icahn has overtaken positions at RJR Nabisco, Yahoo!, Texaco, Phillips Petroleum, Western Union, Gulf & Western, Viacom, USX, American Can, Imclone, Marvel, Federal-Mogul, Kerr-McGee, BEA Systems, Medimmune, and Time Warner.  Icahn is currently worth about $14 billion.

Related Links:
1. NYT
2. The Icahn Report

“The Microsoft negotiations were just the latest example of the negligence by this board,” stated Eric Jackson, a major Yahoo! shareholder and President of Ironfire Capital. “There is still a lot of anger and frustration among shareholders right now.”

Tomorrow is a big day for Yahoo! Inc. (NASDAQ:YHOO).  It is the day that the search engine company has their annual shareholder meeting.  The shareholders will be able to vote on whether they want to the current Yahoo! Board of Directors to stay or not. 

At last year’s shareholder meeting, Eric Jackson expressed his extreme disapproval of Terry Semel, former CEO of Yahoo!  Six days after the shareholder meeting, Semel stepped down.  Jackson plans a repeat performance this year against Jerry Yang.

“I will not be attending. The proxy fight is over and it will not do shareholders or Yahoo! any good to have the annual meeting turn into a media event for no purpose. Last week, I realized it was impossible to gain enough support from the large institutions to win a majority of the Yahoo! directorships,” stated Carl Icahn, a new Yahoo! Board member.  “A few days ago, I met with both Jerry Yang and Roy Bostock and I believe both gentlemen genuinely wish that we will be able to work together to enhance value.  While we still disagree on many points, I have great hope ‘this will be the beginning of a beautiful friendship.’”

Carl Icahn writes that he hopes this will be a beautiful friendship two months after writing:
“Until now I naively believed that self-destructive doomsday machines were fictional devices found only in James Bond movies. I never believed that anyone would actually create and activate one in real life. I guess I never knew about Yang and the Yahoo Board.”

Related Links:
1. Eric Jackson’s blog
2. Carl Icahn’s blog
3. Associated Press

Yahoo Inc. (NASDAQ:YHOO) has reached an settled on agreement with Carl Icahn.  Carl Icahn will be given the chance to appoint himself and two other people to the Yahoo! board.  Yahoo! was able to prevent a showdown on August 1st during the annual shareholder meeting.  Yahoo!’s board will expand from 9 members to 11.  Jerry Yang, Yahoo!’s current CEO along with 8 other members will be looking to stand for a re-election.

“While I continue to believe that the sale of the whole company or the sale of its Search business in the right transaction must be given full consideration, I share the view that Yahoo’s valuable collection of assets positions it well to continue expanding its online leadership and enhancing returns to stockholders,” stated Icahn in a letter regarding the settlement.

Yahoo!’s current board turned down 3 acquisition offers from Microsoft over the last few months while Carl Icahn was pushing Yahoo! to sell themselves.  If Icahn keeps persisting on selling Yahoo! while the rest of the board maintains their position, then there will obviously problems with keeping the search engine company stable.

But in the meantime, Yahoo! has removed the banner that they placed on the homepage that made Icahn look bad.