All Things Digital

BoomTown was press-ganged into attending an afternoon showing of “Kung Fu Panda” with a pair of 6-year-olds (who afterward hiii-yaaa-kicked every trash can in sight), or I would have posted Yahoo President Sue Decker’s letter to the troops she sent out today about the departure of Network division head Jeff Weiner earlier.

Actually, the movie about a misfit who conquers despite the odds would make a nice metaphor for Yahoo these days, especially if the company could be motivated to butt-kicking activity simply by a desire for tasty dumplings.

As I previously posted, Weiner’s departure from Yahoo (YHOO) was made official today in an announcement by Accel Partners and Greylock Partners, where he will become an executive in residence.

I would decode this latest letter, sent to me by several Yahoos, as usual, but it is kind of vintage Yahoo–with an all’s-well-that-ends-badly tone of most of the company’s missives of late.

So let’s just let it speak for itself:

As some of you may know, Jeff Weiner and his wife Lisette celebrated the birth of their new baby girl, Sophia, four weeks ago, and Jeff has been on a scheduled paternity leave. Over the course of his time away, Jeff and I spoke a few times as he reflected on his priorities. After careful consideration, he has decided to leave Yahoo to spend more time at home with his new family before beginning a new chapter in his career. On an interim basis, Jeff’s team will report to me as we consider how to best move the organization forward.

Sue

Also, here’s that much more entertaining chopsticks-dumpling fight scene from “Kung Fu Panda”:

One hoped that the Apple iPhone 3G media Hypestar that descended on the tech news arena would have been able to drown out the irksome bickering that has seemingly become a daily occurrence between billionaire investor Carl Icahn and Yahoo (YHOO) via dueling public letters.

But no! And, unless Microsoft (MSFT) mercifully steps in and forks over $34 a share to rebid for all of Yahoo, it’s likely this playground-level of fighting will go on until Aug. 1.

Why? Because that’s when Yahoo will hold its annual meeting, which is where Icahn’s proxy fight against the company will presumably come to a head.

Thus, it’ll be a long, hot, tit-for-tat summer and I expect my 3-year-old son–who can break out into “Kung Fu Panda” hiii-yah dementia at any moment–will be behaving better than this pair in the three months ahead.

I can’t believe that BoomTown is saying this–given that we hoped and prayed for the day when Yahoo would finally emerge from its year-long cone of silence and start talking.

As it turns out, those were the days, my friend.

Because the back-and-forth between Yahoo Chairman Roy Bostock and Icahn has all the annoyance of two cats howling at each other in the alley in the middle of the night and none of the suspense.

Let’s be clear: This is mostly Icahn’s poison-pen war, trying to whip up a big dish of shareholder ire, in order to increase his threat and, of course, the possibility of a big payday for himself.

Does BoomTown imagine Icahn cares one little bit about the employees of Yahoo or the best course of action for the company?

Not even one teeny-weeny little bit. And yet, he must drone on.

Like yesterday, when Icahn fired off another of his increasingly fanciful missives on the same basic theme: Yahoo is run by idiots.

Previously, he had focused on Yahoo’s botching of the Microsoft takeover fight, the evils of the generous severance plan Yahoo put in place and then on his intention to oust Yahoo CEO Jerry Yang.

Now, Icahn is moving onto a golden oldie with an accusation that Yahoo let Google (GOOG) clean its clock over the last few years.

What? You’re kidding! Actually, even the not-so-swift Jo from “The Facts of Life” would have caught onto that fact of tech life long, long ago.

Nonetheless, Icahn blusters: “I ask again what your great ‘plan’ has been over the last few years. … Why did you permit Google to leave you in the dust?”

Previously, he had meandered into spy-versus-spy territory with this gem: “Until now, I naively believed that self-destructive doomsday machines were fictional devices found only in James Bond movies. I never believed that anyone would actually create and activate one in real life. I guess I never knew about Yang and the Yahoo Board.”

Cue the 10-second countdown of the nuclear missile aimed at New York, as Yang strokes his white Persian cat malevolently!

Which is why it is perplexing that Yahoo chooses to so quickly engage with Icahn by answering such dopiness.

But Bostock did with the seriousness of a righteous preacher, when he stated primly last week: “Conspicuously absent from your letter is any credible plan for Yahoo other than a repetition of your insistence that the company should sell itself to Microsoft. Indeed, your stated view that ‘the only way to salvage Yahoo in the long if not short run is to merge with Microsoft’ demonstrates that you have no other plan and causes one to wonder what exactly would happen to our company if you and your nominees were to take control of Yahoo.”

Well, it is a good point, but hardly one that makes me cheer for the Yahoo side to win.

And then again yesterday, in a letter to shareholders about the upcoming annual meeting, Yahoo gave this limp defense for not backing Icahn, without including new ideas of why its incumbent board deserved a second chance:

“Given Microsoft’s stated position of not wanting to acquire Yahoo, the election of Mr. Icahn’s slate could result in substantial erosion of stockholder value.”

Apparently, there is one thing the pair do seem to agree on, and so do I: A substantial erosion of shareholder value seems inevitable as this caterwauling continues.

Throughout this new series of developments in the Yahoo (YHOO) takeover circus, Microsoft (MSFT) has been unusually quiet about billionaire investor Carl Icahn’s efforts to take over Yahoo’s board via a proxy fight and then turn around and make a deal to sell the company to the software giant.

But will that last, especially considering a letter that Yahoo Chairman Roy Bostock wrote yesterday in response to Icahn’s missive about launching his bombs at Yahoo’s top brass?

Several sources at Microsoft said the company is mulling over whether to write its own letter to counter the points Bostock made in his letter responding to Icahn’s letter, which would essentially call Bostock’s out as a slanted and inaccurate version of the Microsoft-Yahoo talks.

Got that? As the letters turn!

Read more »

Could we resist? No, we could not.

Thus, BoomTown’s translation of Saturday’s letter from Microsoft (MSFT) CEO Steve Ballmer to the Yahoo (YHOO) Board of Directors, which has been resisting the software giant’s efforts to buy the troubled Internet portal for $31 a share in an unsolicited takeover.

The well-written letter was surprising in its clarity, but it still masked several secret messages.

Ballmer wrote: April 5, 2008
Board of Directors
Yahoo! Inc.
701 First Avenue
Sunnyvale, CA 94089

Dear Members of the Board:

Translation: Dear Members of the Board, whom I will be replacing very soon with my own slate, which includes the three judges from “American Idol” (Simon promises to behave and Paula promises not to), as well as the sock puppet from Pets.com, the PC Guy in those #@#*! Apple commercials and also Microsoft Bob.

Ballmer wrote: It has now been more than two months since we made our proposal to acquire Yahoo at a 62% premium to its closing price on Jan. 31, 2008, the day prior to our announcement. Our goal in making such a generous offer was to create the basis for a speedy and ultimately friendly transaction. Despite this, the pace of the last two months has been anything but speedy.

Translation: What? A middle of the night crank call from me, yelling and screaming and threatening “Terminator”-like destruction if you did not acquiesce was too much?

Didn’t you get the flowers I sent the next day?

Ballmer wrote: While there has been some limited interaction between management of our two companies, there has been no meaningful negotiation to conclude an agreement. We understand that you have been meeting to consider and assess your alternatives, including alternative transactions with others in the industry, but we’ve seen no indication that you have authorized Yahoo management to negotiate with Microsoft. This is despite the fact that our proposal is the only alternative put forward that offers your shareholders full and fair value for their shares, gives every shareholder a vote on the future of the company, and enhances choice for content creators, advertisers, and consumers.

Translation: I tried not to be annoyed when you had dinner with News Corp.’s (NWS) deal-loving Rupert Murdoch, or when you flirted with those we-gotta-make-some-move-any-move execs at AOL (TWX) (Bebo for $850 million in cash=Microsoft’s $240 million investment in Facebook).

But dithering around with Google (GOOG), whose secret corporate motto is “Poke Microsoft With a Stick Often,” even after it has been slapping you around Silicon Valley for years?

Ballmer wrote: During these two months of inactivity, the Internet has continued to march on, while the public equity markets and overall economic conditions have weakened considerably, both in general and for other Internet-focused companies in particular. At the same time, public indicators suggest that Yahoo’s search and page view shares have declined. Finally, you have adopted new plans at the company that have made any change of control more costly.

Translation: Google keeps slapping you silly in search, then you slap us with a costly severance plan. It’s like we’re Curly in a Web-version of “The Three Stooges.”

Why I oughta….

Ballmer wrote: By any fair measure, the large premium we offered in January is even more significant today. We believe that the majority of your shareholders share this assessment, even after reviewing your public disclosures relating to your future prospects.

Translation: Legg Mason and Cap Re and Citi and the rest of them are with us and not with you. Why? They like us, they really like us. Also, we are much scarier.

Ballmer wrote: Given these developments, we believe now is the time for our respective companies to authorize teams to sit down and negotiate a definitive agreement on a combination of our companies that will deliver superior value to our respective shareholders, creating a more efficient and competitive company that will provide greater value and service to our customers. If we have not concluded an agreement within the next three weeks, we will be compelled to take our case directly to your shareholders, including the initiation of a proxy contest to elect an alternative slate of directors for the Yahoo board. The substantial premium reflected in our initial proposal anticipated a friendly transaction with you. If we are forced to take an offer directly to your shareholders, that action will have an undesirable impact on the value of your company from our perspective, which will be reflected in the terms of our proposal.

Translation: We can do this the easy way or the hard way. The easy way includes tasty breakfast pastries and yummy hot cocoa (unlimited marshmallows, of course!) and lots and lots of hugging.

The hard way? Tepid lattes in the Silicon Valley soup kitchen lines for you, after your stock drops to the bottom of a bottomless well when we pull out!

Ballmer wrote: It is unfortunate that by choosing not to enter into substantive negotiations with us, you have failed to give due consideration to a transaction that has tremendous benefits for Yahoo’s shareholders and employees. We think it is critically important not to let this window of opportunity pass.

Translation: Like I said before, I won’t be ignored, Jerry! I have a very sharp proxy firm and I am not afraid to use it!

Also, I am not above boiling your annoying exclamation point.

Ballmer wrote: Sincerely,

Steven A. Ballmer
Chief Executive Office
Microsoft Corp.

Translation: If you’ll be my bodyguard,/I can be your long lost pal!/I can call you Jerry,/And Jerry, when you call me,/You can call me Steve!