Microsoft and Carl Icahn tell us that if we fire Jerry Yang and Yahoo's board at the shareholder meeting next month, they'll restart deal talks. Specifically, they'll discuss a search deal with "large financial guarantees" or maybe even a whole buyout.
This is a step in the right direction: As of last week, Carl just wanted us to fire Jerry and the board as retribution for blowing the Microsoft deal. Now that we know Carl and Steve Ballmer are in cahoots, we're encouraged that Carl might have a plan beyond replacing Jerry with Frank Biondi.
Alas... if Carl and Steve want us to fire Jerry at the shareholder meeting, they're going to have to provide some more details. Specifically, they're going to have to tell us:
- who they're bringing in as CEO,
- what that person is going to do besides trying to sell the company to Microsoft, and/or,
- what specific terms Microsoft will offer for either a search deal or a buyout
Why do we need to know these things? Because Jerry's plan for Yahoo is sound. He may not be the best guy to execute it--an experienced operator would help--but we'd rather see Jerry cede the CEO slot to a strong operator than have the company decapitated with no idea of who is going to step in to run it and whether Steve Ballmer will offer anything even remotely attractive (and stick with the offer long enough for the new board to sign off on it).
Steve Ballmer is not a buffoon. At this point, we can't imagine that Microsoft would pay more than $25-$27 for Yahoo, but even that takeout price might look good if Yahoo is paralyzed for another several months while a new board conducts a CEO search (or, worse, brings in a new CEO who doesn't know anything). The longer Microsoft waits, the better its price gets, and we imagine this is not lost on the folks in Redmond. Also, Microsoft has already made a search offer with "large financial guarantees" and it wasn't good enough--so why will it be much better this time?
We like the fact that Carl is agitating for change, and we can certainly understand why Microsoft wants to deal with a new set of negotiators. But the fact that Microsoft is "interested" in pursuing new talks with a new board isn't enough. If Carl and Steve want us to fire Jerry and the board, we need specifics.
See Also: Microsoft to Yahoo Shareholders: Fire Board and We Might Buy Company
