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Those mourning the loss of racy comedian George Carlin this morning will be glad to know that it's not too late to get tickets to Carlin's "Live comedy," according to Yahoo.
Okay, you can't really catch Carlin live anymore. But this morning Yahoo pages carried the awkward juxtaposition of the news of Carlin's death with advertisements to "Save on tickets for Carlin's live comedy." Well, yes. We're sure those tickets are very cheap now.
(Click image for larger version.)
Carl Icahn said Tuesday that Microsoft Corp needs Yahoo to be competitive with Google over the next five years.
"They can't compete" if the company doesn't acquire Yahoo, he said at the annual New York Financial Writers Association Awards Dinner at the Marriott Marquis in Times Square.
Icahn cited Google's incursions into core Microsoft businesses such as word processing and spreadsheet applications. Microsoft's Word and Excel have dominated this area for years. Google recently launched its own versions of these products, giving them away free on its website.
"Microsoft needs this company," Icahn said. "They have to be on the internet if they're going to compete with Google. These applications are all going online."
Icahn owns 10 million shares of Yahoo, and has put up his own slate of directors to replace Yahoo's board. He wants the company to rethink it's resistance to being acquired by Microsoft, which withdrew a bid for the company earlier this year saying Yahoo was not cooperating.
Carl Icahn said today that he will seek to oust Jerry Yang as Yahoo's CEO if he wins his proxy fight bid to control the company's board. Was this every in doubt?
What seems to have really annoyed Icahn is information released when a Delaware judge unsealed a shareholder suit against Yahoo. The unsealed pleadings revealed that even as Yahoo was claiming to consider the Microsoft bid, it adopted an expensive an employee-severance plan that Icahn is characterizing as an underhanded poison pill meant to scuttle the deal.
"It's no longer a mystery to me why Microsoft's offer isn't around," Icahn says in an interview with the Wall Street Journal. "How can Yahoo keep saying they're willing to negotiate and sell the company on the one hand, while at the same time they're completely sabotaging the process without telling anyone?"
In other news, the Yahoo board is scheduled to meet today.
Icahn Steps Up Yahoo Attack, Seeks Yang's Ouster as CEO [Wall Street Journal]
Yahoo's shareholder troubles don't end with the proxy fight started by Carl Icahn. A Delaware court today unsealed a complaint filed by Yahoo shareholders against the company over its alleged bungling of Microsoft bid to buy the company.
Yahoo had sought to keep the lawsuit under seal. It was originally filed by the Police & Fire Retirement System and the General Retirement System of the city of Detroit in February. The company claimed it contained sensitive information. Today the court smacked down that contention.
Yahoo shareholder suit unsealed in Delaware [MarketWatch]
Carl Icahn got the go ahead from the Federal Trade Commission to scoop up huge amounts of Yahoo stock. Icahn owns around 10 million Yahoo shares now, and has options to acquire another 49 million. He said he's seeking clearance from the FTC to buy up to $2.5 billion of the stock.
In our not-so-free market, you need the FTC's approval to make stock purchases worth $63 million or more.
In other news, we just noticed that Jerry Yang and Steve Ballmer apparently played golf together last weekend. They may or may not have chatted about a deal but probably not the straight-up acquisition that Icahn wants. Icahn, of course, hates executives who play golf. Is there any chance that Ballmer and Yang arranged the meeting over golf to piss off Icahn?
Icahn gets antitrust go-ahead for Yahoo stock buy [Yahoo--heh]
Bill Miller, the Legg Mason fund manager who controls 5.4 percent of Yahoo, wants to see Microsoft buy the company. Halfway measures--such as a joint venture --don't interest him.
That would seem to put him squarely in Icahn's camp. But Miller's still being coy, saying he's undecided on how he'll vote in the proxy fight.
Legg's Miller undecided on Icahn's Yahoo slate [Retuers]
So Microsoft chief executive Steve Ballmer says the company is not looking to buy Yahoo. They're talking about other stuff that might "create value" or some such. It's pretty much what we learned on Sunday, when Microsoft and Yahoo disclosed that they were in negotiations.
Is a buyout really off the table? The market doesn't seem to think so. Shares are down a bit today but not by what you'd expect them to drop if the buyout was really done. Perhaps Ballmer is just sticking to the script, playing hardball to get a better price for Yahoo.
Still, this can't make Carl Icahn and the rest of his hedge fund cohort happy. (Then again, he's still up about $120 million, which would keep us happy.)
Microsoft Not Bidding to Buy Yahoo: CEO Ballmer [Reuters via ABC News]
Third Point LLC, the $5.7 billion hedge fund run by acid penned yoga enthusiast Dan Loeb, is getting into the Yahoo acquisition trade, Reuter's great Dane Hamilton is reporting. The fund has accumulated a stake of over 5 million shares, and may build a 10 million share stake. At the end of March, Third Point held only 1 million shares.
Texas oil legend T. Boone Pickens revealed this morning that he owns 10 million Yahoo, and plans to vote them in support of Carl Icahn. Paulson & Co, another large hedge fund that is bursting with funds after making a killing last year shorting subprime, disclosed last week that it holds 50 million shares and is supporting the Icahn move. Capital Research owns 85 million shares and Legg-Mason owns 83 million. Both are thought to favor a deal to sell Yahoo to Microsoft.
ARS-ED is a new weekly feature on what we're learning from Andrew Ross Sorkin's weekly column, DealBook, in the New York Times.
It was about a year and a half ago when we first saw New York Times hotshot Andrew Ross Sorkin in the same room as Carl Icahn. They were on a panel together at some midtown club, discussing exactly what you'd expect Sorkin--who runs DealBook for the Times and is the paper's top M&A reporter (and is rumored to be in the running to take the top editorial job at the Wall Street Journal)--and Icahn to discuss: deals, CEOs and money.
(After the jump, more on what we learned at that panel and what we learned this week from Sorkin.)
Carl Icahn apparently isn't happy with the latest talks between Microsoft and Yahoo, and it looks like the financier is using proxies to threaten to push Yahoo into Google's arms.
Dane Hamilton at Reuters is reporting that Icahn, who holds 9 million shares and options for 49 million more, could attempt to scuttle a deal between Microsoft and Yahoo if it falls short of a complete merger.
"Microsoft is trying to get the milk without buying the cow, and if you look at Icahn's history, he has never been used that way," a person described as "familiar with the financier's thinking" tells Hamilton. "He does not want to see Yahoo pushed into some joint venture with Microsoft and is not going to be used to push Yahoo into it."
But could Icahn's eagerness to have a deal now be scuttling Microsoft's long-term deal plans? UBS analysts are floating the idea that a more limited partnership deal between Microsoft Yahoo could be a a stepping stone to an acquisition. The idea is that since Yahoo announced its refusal to go all the way with Microsoft when it first proposed the deal, perhaps it might relent after a bit of a courtship.
Microsoft move unlikely to win Icahn favor: source [Reuters]
There was lots of chatter this morning about the possibility that Microsoft is negotiating to buy Yahoo's search business. But the latest rumor is sure to set the internet ablaze with speculation--people are saying that after inking the deal with Yahoo, Microsoft will turn around and buy internet favorite Facebook.
"What a move this makes. Yahoo gets everyone off their back, Microsoft gets a credible position in search, and buys Facebook to compete with Google," Furrier.org writes. "The price about $45 billion."
Silicon Valley Rumor: Microsoft to Buy Yahoo Search and Then Facebook [Furrier.org]
The key to Yahoo! chief Jerry Yang’s apparently successful attempt to avoid being Microserfed was the threat to enter into a partnership with Google. Under the proposal, Yahoo! would outsource to Google important paid search terms, a move that struck many as all but admitting that Yahoo was incompetent at monetizing search terms and that seems to have driven away Microsoft’s Steve Ballmer.
It was a cagey move but is it legal? Can the management of a public company targeted for opposition adopt a perhaps suicidal business plan to drive away suitor? Maybe not. Although Delaware courts—which, for quirky federalist reasons, get to decide these things—give companies broad leeway to undertake defensive measures, there are supposed to be limits to this sort of thing. Stephen Bainbridge, one of our favorite law professors, explains that Yang’s takeover defense might be acceptable to Delaware courts if he could prove it was part of Yahoo’s long-term business plan. But that seems implausible—everyone knows they came up with this as an ad-hoc defense.
If Microsoft really wanted to get hostile, they might have actually been able to get a Delaware court to stop Yahoo from running into the arms of Google.
Using a strategic partnership as a poison pill [Bainbridge]
Yahoo’s so happy, ‘cause today, it’s found some friends that aren’t just in its head. Yahoo bought pre-modern psychiatric mood-stabilization treatment BlueLithium (the original “up” in 7up) for $300 million. BlueLithium, founded in 2004, buys banners on lots of sites and resells them to advertisers (wow, put that way the whole thing sounds like a huge sham, like GoDaddy or other internet resellers).
BlueLithium claims that it puts its 120 San Jose employees to good use doing more than banner scouring, and that the company uses sophisticated “behavioral-targeting technology” beyond the banner scouring guy marking down what site the banner was on and putting two and two together (hmm, I bought this banner on a porn site, my “behavioral-targeting spidey sense is telling me that the buyer of this ad may want to target deviant porn addicts, and that the behavior of those users may be, to click on a lot of porny looking things).
Yahoo adds the upper to its hodgepodge assortment of other newly acquired advertising related sites and services, including ad-exchange Right Media.
Yahoo’s share price is so ugly, but that’s ok, cause so are you. Yahoo’s will is good and shares are up over a half percent in morning trading.
Yahoo Expands Online-Ad Reach [Wall Street Journal]
Bear Stearns, trying to deflect attention from its own woes, re-sparked Yacrosoft speculation, after it was re-sparked last May. Bear Stearns analyst Robert Peck wrote in a letter to clients that he thinks Microsoft "continues to evaluate Yahoo as a target," and that a potential bid could fetch a $50 per share price tag - currently double Yahoo's current share price. Bear set a price target of $30 per share on its latest Yahoo report.
Yahoo (Nasdaq: YHOO) is up more than 5% today at $23.96 a share.
UPDATE 2-RESEARCH ALERT-Bear Stearns names Yahoo as top pick [Reuters via DealBook]
Baidu and Yahoo China, two of the most popular search engines in China, facilitate the country's near 100% rate of downloaded music that is stolen. That's right, almost all music downloaded in China is stolen (more proof that the Chinese are smarter than us). Other search engines in China, like Google China, don't have a built-in mp3 download tab, and are pissed that they can't gain search engine market share.
The International Federation of the Phonographic Industry (and the world of tomorrow), a consortium that includes reps from Sony BMG, Universal and Warner, is on the case, suing nearly everyone in China. The organization reportedly wins 90% of its lawsuits, but loses suits against the big boys like Baidu, which entrenches the current search engine pecking order by crippling the little guy... with slaps on the wrist. Since the averages damages awarded per lawsuit amount to $130 (yes, dollars), getting sued isn't that big of a deal to a budding search provider. The IFPI spends about $13k per case, which is a bold profit shucking initiative that only the record companies could dream up.
In other search engine news, Google and Yahoo have teamed up with Mercedes to allow each search enginge's map services to be sent to your car, if your car is a Mercedes. You know the state of auto-navigation is in trouble when car GPS systems are Google mapping a destination. The service will be available on the S-class, CL-class and entire 2008 C-class lineup.
Deaf to Music Piracy [BusinessWeek via Valleywag]
Google, Yahoo to direct your Mercedes [News.com via Valleywag]
When it comes to making meaningless strides towards outshining once-dwarfed competitors, no one shines brighter than Yahoo. Yahoo is finally ahead of Google... in the University of Michigan's American Customer Satisfaction Index (ASCI) report on electronic-business Web sites. The report ranks websites on a 100 point scale and measures customer satisfaction of the search engine, news and information found on the site. This year, Yahoo rose to a score of 79, while Google dipped to a 78.
In terms of making strides toward convincing the market it isn't a complete train wreck, Yahoo has a ways to go. The market still doesn't value Yahoo as a bargain even though it's lost a quarter of its value in the last three months and its former equity research analyst President Sue Decker just bought $1.1 worth of Yahoo stock with her own money. Despite the downfall, Yahoo is valued at a 47x P/E ratio, which is still more than Google's 43x.
The consensus opinion of equity research analysts may cast some doubt on those willing to take the plunge with Decker and snap up Yahoo stock. 19 of 39 analysts profiled by Thomson have a "buy" rating on Yahoo (3 of those are a "strong buy") while only 1 has a "sell" recommendation (the rest are "holds"). JPMorgan even upgraded Yahoo at the end of May. Buying Yahoo at the end of May - not that great of a move, as you would have lost 16% on your investment. The bullishness of research analysts in the face of reality is a sure sign to keep dumping Yahoo shares, as TheStreet.com advises.
Yahoo is down over 1.75% to $24.12 a share, inching closer to its 52-week low of $22.44.
Yahoo Takes Top Spot From Google In Customer Satisfaction Report [Wall Street Journal]
Slumping Yahoo! Still No Bargain [TheStreet.com]
Yahoo Personal Finance's "Brazen Careerist" Penelope Trunk has more advice in her "New Girls' Guide to Workplace Suckcess." Penelope's five steps to success for girls (I am not making any of these up):
1. Date coworkers
At least for a couple hours at a time. Waving goodbye to self-respect by climbing the corporate ladder the old fashioned way is the new feminist empowerment.
2. Show some flesh - but just enough
Penelope's suggested work attire is pictured. Have medium length hair, a little bit of makeup, and find that happy medium between dressing like a dude and a prostitute (or as Penelope puts it, "a man and a harlot").
3. Expect harassment, and stay cool
Since you're already dressing like a hooker and soliciting co-workers, odds are you're going to get harassed.
4. If you have to go to business school, go early
That is, if your business school has a morning and afternoon session, like your kindergarten.
5. Tone down your work ethic
Since girls are smarter than boys, it's best to give yourself a bit of a handicap. "So stop being the overachiever who does each assignment perfectly. Instead, start focusing on the stuff that really matters at work," like dating and in-office burlesque.
The New Girls' Guide to Workplace Success [Yahoo Personal Finance]
Yahoo! Finance Expert Penelope Trunk's Advice Riles Some Readers [Associated Content]
When the imminent blow up of 50% of the world’s hedge funds get us down we like to troll Yahoo Personal Finance for a good re-centering. Some days you just crave the financial wisdom only an ex-pro volleyball player can provide (Penelope Trunk, the Brazen Careerist).
Scrolling down the page and seeing the latest mug in the “EXPERT OPINION” columns, we were like, “No way, Ali Larter writes a Yahoo Personal Finance column!” It makes sense, especially since her son can tap into ATMs and crash markets by touching a Bloomberg terminal.
To our chagrin, the latest Yahoo EXPERT has never appeared in front of Dawson wearing a whipped cream bikini but is rather Anya Kamenetz (but back me up on the fact that her thumbnail-sized head looks like Ali Larter). Anya, or “AK” as the other Crips call her, is a 26-year old Yale alum who started a column called “Generation Debt” at the Village Voice and rode it into a book deal. It also helps in no way whatsoever that everyone the girl knows is an author, like both her parents.
Her columns are detailed affairs about student loans and other cool forms of crippling debt that we could tell you more about if we could get through them. Unlike Penelope’s work, which makes Highlights Magazine seem like a corporate finance textbook, Anya’s columns make corporate finance textbooks seem like issues of Maxim. I guess Yahoo Personal Finance is just balancing out the universe.
Anya now lives in Brooklyn with her husband and cat, although she is listed as “single” on MySpace. If her cat saw that he’d be pissed. You can check out Anya’s personal website here, and find out that she takes great glamour shots (although the verdict is still out, how is she in person?), has written for every publication ever…published, and get her reaction to 9/11.
We all know the real way to differentiate accomplished 20-somethings is by looking at their reactions to 9/11, each more profound than the last. Going down the line, after 9/11 Dana Vachon started reading “Lord of the Rings,” Chelsea Clinton called for everyone except herself to serve her fellow man and Anya Kamenetz realized right away that the attacks were going to be a total career buzz kill. Here’s Anya, quoted in a 2005 version of the Boston Phoenix:
"The whole dot.com thing has passed," says Kamenetz, who graduated from Yale seven months after the 9/11 attacks. "There was a feeling among my peers and I that we had gotten a bum deal, sort of. Politically things were going badly, economically things were going badly."
Stay tuned for more "bum deals" on Yahoo Personal Finance.
Laying Down the Law on Wider College Access [Yahoo Personal Finance]
ANYA KAMENTZ
The strict constructionists at Yahoo wanted to make the right acquisition for once, so they went and bought Right Media for $700 million. Right Media is an online advertising exchange that allows web publishers to auction ad space to the highest bidder, collecting a 7% commission in the process. Yahoo feels this will give it a leg up on Google and Microsoft, who have not yet taken full advantage of the internets in this way, in the form of more dynamic, fancier graphical popup ads.
Yahoo bought just the tip of Right Media last October (20% of the company for $40 million), just for a minute, just to see how it feels, and finally went full throttle with this move. Yahoo figured it could get the company on the cheap if it just destroyed some of its own value, from the San Jose Mercury News:
Two weeks after Google agreed to buy DoubleClick in April, Yahoo announced it was buying the rest of Right Media for $680 million. By the time the cash-and-stock deal closed, the final price for the remaining 80 percent stake in Right Media had fallen to $650 million because of Yahoo's skidding stock.
Well played Yahoo, well played.
Yahoo Completes Right Media Buy [DealBook]
Yahoo takes control of Right Media to get jump in race to expand online ads [San Jose Mercury News]
After activist shareholders pushed Terry Semel out of Yahoo last week, his successor Jerry Yang needs to raise the floundering search engine’s advertising revenue quickly or re-don his jester cap as Chief Yahoo. Social networking is the obvious answer and after a potential Yahoo-Facebook deal fell apart earlier this year, Rupert Murdoch is the man to see. The Times of London, a News Corp. holding, reported yesterday that Murdoch and Semel had been in talks to trade MySpace for a 25% ($10-12bn) stake in Yahoo.
It is more than likely that Yang will pursue this deal with the leading social networker, even at Murdoch’s inflated price. Rupe paid $580mn for MySpace two years ago, but after Facebook’s financer said he wouldn’t sell for less than $8bn, a $10bn MySpace shouldn’t be anathema to Yahoo. If Yang balks at the Murdoch proposal, it may go down with Semel’s infamous missed opportunity to buy Google and will probably mean an interim-only CEO appointment.
With the news, Yahoo traded up 1.6% to $28.08 and News Corp. was up 1% to $23.92.
Yahoo! For MySpace? [Forbes]
The social network bubble [Valleywag]
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