Kara Swisher

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Jerry Yang’s Pledge: Not on My Watch

If BoomTown had any doubt that Yahoo CEO Jerry Yang was going to knuckle under to the public kneecapping given to him by the activist investor Carl “Shark” Icahn and Microsoft CEO Steve “My Way or the Highway” Ballmer earlier this week, that was firmly disabused in a bracing conversation we had yesterday.

“I think handing over the company to Carl Icahn for the express purpose of hoping he can negotiate a complex deal with Microsoft is a big mistake for shareholders,” said Yang firmly and in no uncertain terms to me. “This is particularly true since Icahn has no plan B and therefore will have no leverage and will be dealing with Microsoft from a position of weakness.”

As for the software giant, which has been trying to no avail to alternatively persuade and bully Yang into selling the company he co-founded since the end of January, Yang is fully ready to rumble.

“Furthermore, Microsoft’s interest in Yahoo has been inconsistent at best and they refuse to even put a firm proposal on the table,” he said. “Their motivations are suspect and there is simply no good reason to think they will actually show up at the end of the day.”

And for the big finish?: “And then what will shareholders be left with? A weakened, Icahn-controlled Yahoo.”

Oh, snap.

His in-your-face comments, adding on to than those Yang made to The Wall Street Journal earlier this week, are definitely not typical for the self-effacing Yang, who is still–despite all that has gone on–well-spoken of by the Microsoft brass.

But the takeaway from our conversation was clear to me–this was not the Kabuki theater script of corporate battles, but a very clear indication that Yang truly feels he is fighting for the heart and soul and future of Yahoo.

It mostly certainly must grate on Yang, who is not known for throwing sharp elbows, that Microsoft publicly joined with Icahn Monday and said it could no longer work with Yang.

And, indeed, Yang has got to despise the idea of Icahn in charge at Yahoo.

Yang is probably right to worry, given that Icahn’s motivations are beginning to feel increasingly more like a shark who needs to be fed, rather than someone who has even a single good idea about getting Yahoo thriving again.

(BoomTown is still waiting for that CEO and Yahoo-juicing-up plan, Carl!)

And while Yang seemed genuine in his belief that he and his board had been open to the Microsoft takeover and still would entertain any kind of new offer Microsoft would make, he also seems just as prepared to face the proxy battle with Icahn at the Aug. 1 annual meeting.

That’s a mistake, of course, as it was for Microsoft to do what it did to win its goal of controlling Yahoo’s search business by backing Icahn so effusively.

But, said multiple sources, because it is equally convinced Yang and the board are impossible to deal with, expect Microsoft to continue sticking to its convenient friendship with Icahn, in order to hammer Yang in the weeks ahead.

Of course, that’s probably more a recipe for disaster than success.

Because, even with all that has occurred, it is still worth it if Yahoo and Microsoft would try hard to avoid a very public clash and come to some sort of deal to partner in a significant way.

What would be even nicer if they would stop engaging in a he-said-he-said about what has gone on before, talking past each other like an endless and really annoying version of “Hannity & Colmes.”

(And I think whatever your political bent, we can all agree that Hannity and Colmes together are really annoying!)

Because, even with all the noise, it should be entirely clear by now that Microsoft and Yahoo need each other.

And, more importantly, both Microsoft and Yahoo will both suffer in the end if they don’t stop driving toward what is increasingly looking like a point of no return.