High drama is expected on Aug. 1 as Yahoo shareholders gather at the company’s Silicon Valley headquarters for the annual meeting.
With corporate raider Carl Icahn pushing an alternative slate for the board of directors to forge a deal with Microsoft, the shareholder election is nothing less than a referendum on Yahoo’s future. The question is, can CEO Jerry Yang mount a convincing argument that Yahoo’s current strategy — chiefly, outsourcing some search business to Google and finding new ways to extend its brand — will yield better results than selling the company, in whole or in part, to Microsoft?
Microsoft and Icahn turned up the heat Monday. In a statement, Microsoft repeated that “we have never been able to reach an agreement in a timely way on acceptable terms with the current management and board of directors at Yahoo.”
But Microsoft added that if a new board is elected, the company would be interested in purchasing either Yahoo’s search business — “with large financial guarantees” — or the entire company.
Microsoft said it continues to believe, as it said on June 12, that “our proposed search acquisition and partnership would have delivered superior value to Yahoo’s shareholders and the marketplace as a whole. We have not changed our position, even as we continue to move forward with our own online search and advertising offerings. We therefore welcome interest by Mr. Icahn in pursuing this and other discussions.”
In a companion statement, Icahn was more explicit about Microsoft’s plans. He said that Microsoft CEO Steve Ballmer cannot cut a deal with the current board because of the risk that Yahoo’s current board would mismanage the company during the time it would take a deal to clear regulatory hurdles. “Their recent track record is far from reassuring,” Icahn added. “Microsoft would be…