Carl Icahn’s CEO Search
by Kara Swisher
Posted on July 9, 2008 at 10:04 AM PT
How’s this for a lead-balloon argument to get shareholders to reject activist investor Carl Icahn in his quest to unseat the Yahoo board and senior management that was uttered by its CEO Jerry Yang in today’s Wall Street Journal:
“To trust Mr. Icahn and his board is really a bad choice.”
Oh. Phew. Thanks for warning everyone, Jerry, so that bullet could be dodged!
But, besides the quote begging the question of what makes Yang a good choice, which he must articulate rather than just diss his rivals, it lacks the necessary oomph that Yang needs to make his case more aggressively and definitively.
That’s especially true, if he is to stop Icahn from gaining the momentum he needs to win his proxy fight against Yahoo (YHOO).
As Microsoft (MSFT) should have done in its attempt at the Yahoo takeover, one has to remember to actually hit the target when you shoot.
So here’s a much better one to needle Icahn with, using an famous old ad tag line:
Where’s the beef?
Specifically, who’s going to mind the store if Icahn actually manages to win and makes good on his promise to fire Yang?
Because if there is one thing that is hurting Icahn’s chances, it is the worry among major Yahoo investors that he simply cannot run Yahoo, even for a short time.
So, of course, he is out beating the bushes for a suitable CEO.
“Carl has to have a management team that he announces soon, so people can see that there will stability if he wins,” said one investor source, in a typical sentiment I encountered. “Taking out a whole board and the top managers of a major public company is drastic.”
Indeed, which is why Icahn has been working feverishly, sources said, to attract someone to run Yahoo in the interim, in the event he wins his proxy battle and he seeks to strike a deal of some sort with Microsoft to buy part or all of Yahoo.
As BoomTown previously reported, Icahn is still attempting to entice former AOL (TWX) head Jon Miller, along former Fox (NWS) Interactive Media exec Ross Levinsohn, to take the job on a temporary basis, sources said.
Neither Miller nor Levinsohn, who now co-run an online-focused investment fund called Velocity Interactive, has agreed to do this yet, a risky move that might tarnish anyone who takes it on.
In addition, most suitable candidates for such a job would likely prefer to do it in a friendly fashion, working with Yang to transition him out of the CEO role.
Yang has acknowledged to several people that some investors, angry about the botched Microsoft takeover deal and the declining stock price, are seeking his ouster, as well as that of Yahoo President Sue Decker.
But Yang is definitely not resigning, as some stock-goosing hedge fund vultures were putting out earlier today.
In any case, Icahn, who has lost money in this activist bid, is working overtime to make that happen by convincing shareholders that he is the better choice to strike a more lucrative deal for Yahoo.
In fact, he underscored it earlier this week when both he and Microsoft released almost exact statements that they were talking and could work with each other. Both also noted that Microsoft did not feel it could work with current Yahoo leadership.
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Comments
It makes huge sense to have Miller and Levinsohn on the board. THere is no way they can leave Velocity to run Yahoo, they have responsibilities there, but imagine what the two of them could bring to the table! Carl is right to court them.
Posted by james baker at July 10th, 2008 at 8:58 am