All Things Digital

BoomTown’s most favorite part of the Yahoo takeover circus?

The dueling letters, of course! How the lovely practice of missives has fallen out of favor, as soulless emails have grown in use.

Well, not in the land of hostile takeovers!

So here’s our decoding of billionaire investor Carl Icahn’s thankfully brief letter to Yahoo’s Chairman Roy Bostock, informing Yahoo (YHOO) he begins bombing in five minutes.

Icahn wrote:

Carl C. Icahn
ICAHN CAPITAL LP
767 Fifth Avenue, 47th Floor
New York, NY 10153

Dear Mr. Bostock:

Translation: Who are you? Whatever. I regret to inform you, but I eat wimpy Chairman of the Board types like you for breakfast.

Icahn wrote: It is clear to me that the board of directors of Yahoo has acted irrationally and lost the faith of shareholders and Microsoft. It is quite obvious that Microsoft’s bid of $33 per share is a superior alternative to Yahoo’s prospects on a standalone basis. I am perplexed by the board’s actions. It is irresponsible to hide behind management’s more-than-overly optimistic financial forecasts. It is unconscionable that you have not allowed your shareholders to choose to accept an offer that represented a 72% premium over Yahoo’s closing price of $19.18 on the day before the initial Microsoft offer. I and many of your shareholders strongly believe that a combination between Yahoo and Microsoft would form a dynamic company and more importantly would be a force strong enough to compete with Google on the Internet.

Translation: Here I am stating the glaringly obvious. But don’t you like my use of self-righteous and indignant words like “unconscionable”?

Nonetheless, I must ask: What are you smoking over there on the Left Coast?

When someone dangles more than $40 billion to anyone on Wall Street, we’d throw our mother under the wheels of the bus if we needed to to get it. Frankly, we would do it for $12.43.

In any case, your break with reality is my golden opportunity.

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In exactly two weeks, Walt Mossberg and I will be hosting Yahoo’s CEO Jerry Yang and President Sue Decker, among others, at the sixth edition of our D: All Things Digital conference.

Of course, there will be a lot of questions for the pair onstage, from either Walt or I, and also the audience (and you can ask your own here to either Yang or Decker or any D6 speaker in text or video), given the incredibly eventful year the much-buffeted Internet company has had.

That got even more eventful yesterday with the news that billionaire activist investor Carl Icahn would decide today whether to enter the fray and wage a proxy fight for the company, entering via the vulnerable position Yahoo (YHOO) has put itself in after not coming to terms with Microsoft (MSFT).

The software giant walked away 11 days ago, after repeated rejections of its unsolicited takeover bid by Yahoo and the blowing of its bluff over price with Microsoft.

Now with Icahn hovering–and there will be more opportunistic investors to come, prompted into action by some of Yahoo’s biggest shareholders, including Capital Research’s Gordon Crawford (don’t say BoomTown didn’t warn you, Jerry)–Yahoo is kind of like a town just whipsawed by a tornado and about to endure a flood.

And then some hail. Also, maybe a locust swarm or two.

Unfortunately for Yang, who also co-founded Yahoo, this 10 Plagues of Sunnyvale ordeal is likely to go on and on and, thus, the questions will not end for a very long time.

And, even more unfortunately, the answer to the most important one he should be asking–what to do now?–is the one that might be now entirely out of Yang’s hands.