Yahoo (YHOO)

[lmrhoades]

Henry or Anyone think YHOO at these prices now with earnings out is a guaranteed $3-4 per share with the looming MSFT bid ending Saturday....any thoughts?
Seems like a easy 10-15% gain
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LMR

[idiotinc]

Jerry Yang has resigned from his position on the board of directors of Yahoo! I've posted the internal memo he sent out on my website:

Jerry Yang Resigns

Yang was pretty universally hated after he rebuffed Microsoft's offer, but I've definitely seen worse CEOs. I'll be interested to see who is selected as his successor.
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Idiot Inc - Ruthless coverage of bad business news

[HenryTo]

What Yahoo turned down from Microsoft:

http://link.brightcove.com/services/link/bcpid959009704/bclid1026280058/bctid1606825185

[HenryTo]

FYI - Icahn now taking this to the next level:
--------------------------------------------------------------------------------
Icahn to seek removal of Yahoo CEO Yang: report
Tuesday June 3, 3:12 pm ET

NEW YORK (Reuters) - Billionaire investor Carl Icahn would seek to remove Jerry Yang as chief executive of Yahoo Inc (NasdaqGS:YHOO - News) if Icahn succeeded in a proxy battle against the company over its failure to reach a deal with Microsoft Corp (NasdaqGS:MSFT - News), The Wall Street Journal reported on Tuesday.

Icahn has proposed an alternate slate of directors for Yahoo's board, but has yet to directly target Yang over the breakdown in talks early this month for a $47.5 billion deal.

"It's no longer a mystery to me why Microsoft's offer isn't around," the Journal quoted Icahn as saying. "How can Yahoo keep saying they're willing to negotiate and sell the company on the one hand, while at the same time they're completely sabotaging the process without telling anyone?"

Icahn cited details from court documents related to a shareholder suit that were unsealed on Monday. The documents showed how Yahoo had taken steps to rebuff a Microsoft takeover bid months before the software maker made its offer public on February 1.

The shareholder lawsuit argued that Yahoo had taken aggressive steps to block a deal, including the adoption of a costly plan to retain employees, leading up to a breakdown in negotiations.

The Journal said Yahoo's board was due to meet on Tuesday. Icahn and Yahoo officials were not immediately available.

Yahoo shares were down 35 cents or 1.3 percent to $26.05 on the Nasdaq

[HenryTo]

T. Boone Pickens buys 10 million YHOO shares:

http://finance.yahoo.com/tech-ticker/article/17905/T.-Boone-Pickens-Picks-Up-10-Million-Yahoo-Shares-Betting-On-Carl-Icahn?tickers=msft,yhoo

[HenryTo]

Gates flat out rejects a deal with Yahoo in the near future:

http://www.dailytech.com/article.aspx?newsid=11722

[HenryTo]

Steve Ballmer's letter to Jerry Yang:

May 3, 2008


Mr. Jerry Yang
CEO and Chief Yahoo
Yahoo! Inc.
701 First Avenue
Sunnyvale, CA 94089


Dear Jerry:

After over three months, we have reached the conclusion of the process regarding a possible combination of Microsoft and Yahoo!.

I first want to convey my personal thanks to you, your management team, and Yahoo!'s Board of Directors for your consideration of our proposal. I appreciate the time and attention all of you have given to this matter, and I especially appreciate the time that you have invested personally. I feel that our discussions this week have been particularly useful, providing me for the first time with real clarity on what is and is not possible.

I am disappointed that Yahoo! has not moved towards accepting our offer. I first called you with our offer on January 31 because I believed that a combination of our two companies would have created real value for our respective shareholders and would have provided consumers, publishers, and advertisers with greater innovation and choice in the marketplace. Our decision to offer a 62 percent premium at that time reflected the strength of these convictions.

In our conversations this week, we conveyed our willingness to raise our offer to $33.00 per share, reflecting again our belief in this collective opportunity. This increase would have added approximately another $5 billion of value to your shareholders, compared to the current value of our initial offer. It also would have reflected a premium of over 70 percent compared to the price at which your stock closed on January 31. Yet it has proven insufficient, as your final position insisted on Microsoft paying yet another $5 billion or more, or at least another $4 per share above our $33.00 offer.

Also, after giving this week's conversations further thought, it is clear to me that it is not sensible for Microsoft to take our offer directly to your shareholders. This approach would necessarily involve a protracted proxy contest and eventually an exchange offer. Our discussions with you have led us to conclude that, in the interim, you would take steps that would make Yahoo! undesirable as an acquisition for Microsoft.

We regard with particular concern your apparent planning to respond to a "hostile" bid by pursuing a new arrangement that would involve or lead to the outsourcing to Google of key paid Internet search terms offered by Yahoo! today. In our view, such an arrangement with the dominant search provider would make an acquisition of Yahoo! undesirable to us for a number of reasons:


-- First, it would fundamentally undermine Yahoo!'s own strategy and long-term viability by encouraging advertisers to use Google as opposed to your Panama paid search system. This would also fragment your search advertising and display advertising strategies and the ecosystem surrounding them. This would undermine the reliance on your display advertising business to fuel future growth.

-- Given this, it would impair Yahoo's ability to retain the talented engineers working on advertising systems that are important to our interest in a combination of our companies.

-- In addition, it would raise a host of regulatory and legal problems that no acquirer, including Microsoft, would want to inherit. Among other things, this would consolidate market share with the already-dominant paid search provider in a manner that would reduce competition and choice in the marketplace.

-- This would also effectively enable Google to set the prices for key search terms on both their and your search platforms and, in the process, raise prices charged to advertisers on Yahoo. In addition to whatever resulting legal problems, this seems unwise from a business perspective unless in fact one simply wishes to use this as a vehicle to exit the paid search business in favor of Google.

-- It could foreclose any chance of a combination with any other search provider that is not already relying on Google's search services.


Accordingly, your apparent plan to pursue such an arrangement in the event of a proxy contest or exchange offer leads me to the firm decision not to pursue such a path. Instead, I hereby formally withdraw Microsoft's proposal to acquire Yahoo!.

We will move forward and will continue to innovate and grow our business at Microsoft with the talented team we have in place and potentially through strategic transactions with other business partners.

I still believe even today that our offer remains the only alternative put forward that provides your stockholders full and fair value for their shares. By failing to reach an agreement with us, you and your stockholders have left significant value on the table.


But clearly a deal is not to be.

Thank you again for the time we have spent together discussing this.

Sincerely yours,
/s/ Steven A. Ballmer

Steven A. Ballmer
Chief Executive Officer
Microsoft Corporation

[HenryTo]

Plays like this - while it looks easy on the surface - have inherent risks that are always hard to quantify unless you're an insider. There is a reason why the share price stalled at under $30 last Friday.

http://www.bloomberg.com/apps/news?pid=20601087&sid=anuVzhuK2Cf4&refer=home