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Summary:

Remember back in the Dark Ages before text messaging, when a teenager (let’s call him Jerry Yang) might get a best friend (maybe call him Carl Icahn) to call another friend (say, Steve Ballmer) using three-way calling? With Yang sitting silently on the line, the goal […]

Remember back in the Dark Ages before text messaging, when a teenager (let’s call him Jerry Yang) might get a best friend (maybe call him Carl Icahn) to call another friend (say, Steve Ballmer) using three-way calling? With Yang sitting silently on the line, the goal would be for Icahn to goad Ballmer into saying how he really felt about Yang. Well, now that we’re adults, and billions of dollars are on the line, all this is done via proxy battles as is the case with the aborted deal for Microsoft, headed by Ballmer, to buy Yahoo, which is headed by Yang.

The whole thing just gets more and more dramatic — the lack of teen girls notwithstanding. Today, Carl Icahn, who holds a large stake in Yahoo, released a letter to Yahoo shareholders where he says he has spent, like, HOURS on the phone with Ballmer, who was still totally interested in Yahoo. But Ballmer’s, like, so worried that Yang and current Yahoo management might “mismanage” the company during the time it takes to get a deal done (because The Federal Trade Commission can take FOREVER, ya know?)

And Ballmer is putting, like, a ton of dough on the line here, so he needs, like, some kind of assurance that Yang and Co. aren’t going to go screw things up. And in the last attempts, he just didn’t get that, ya know? So Ballmer just HAD to walk away, right? But with a different board, you know, like Icahn’s board? Then, maybe Microsoft could forget about the past and get a deal done. In his letter Icahn says:

I strongly believe that in very short order the new board would, subject to its fiduciary duties, be presenting to shareholders either a purchase offer for the whole company or a very attractive offer to purchase “Search” with large guarantees. I hope to continue to be speaking to Steve over the next few weeks; however, since I do not as yet represent the Yahoo! board, both Steve and I do not wish to get into details over price, or even which of these transactions makes the most sense.

So Icahn, who has, like totally, put up his own slate of directors who would work with Ballmer, could really make this deal happen if shareholders would just, you know, LISTEN to him and vote for his board. Totes!

BTW, the whole crew, including Google and AOL guys, will be in Sun Valley this week for the swanky Allen & Co. media conference. It’s like a high-power slumber party where deals get done and the press gets excluded. Maybe Yang will ditch Ballmer and Icahn for Time Warner CEO Jeff Bewkes who head AOL. Tune in next week for the latest on Gossip Guys.

Update: Microsoft issued its own statement backing Icahn. If Icahn gains control of the board at the Aug. 1 shareholder meeting, Ballmer would talk deals again, either buying just the search assets or possibly the whole company.

Update 2: Yahoo tells Ballmer, “If you want a deal, say that to my face.”

  1. I’d like to see Bill Gates on this new Yahoo! board.

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  2. [...] MicroHoo deal is possible, says Carl Icahn, if the Yahoo! (YHOO) board is ousted.  (DealBook, GigaOM.com, Silicon Alley [...]

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  3. Why this endless obsession by Microsoft to strike a deal with Yahoo to the extent that MSHT is resorting to acts of desperation like undermining Yahoo’s board?Is Microsoft telling us that its online future is now heavily tied to this deal? Are there no viable alternatives besides this acquisition route to strengthen their online presence?Why Microsoft Should Forego the Acquisitions Route(http://www.internetevolution.com/author.asp?section_id=625&doc_id=158193&F_src=flftwo)

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  4. [...] landscape of internet titans, the Microsoft/Yahoo! power struggle is looking more like a teenage soap opera, albeit one with billions of dollars and control of the #2 internet search position in play. But [...]

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  5. Lol @ ‘Microhoo’…

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  6. [...] Comment on Gossip Guys: The Microsoft-Yahoo Saga by In Microsoft …landscape of internet titans, the Microsoft/Yahoo! power struggle is looking more like a teenage soap opera, albeit one with billions of dollars and control of the #2 internet search position in play. But [...]

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  7. [...] The Wall Street Journal reports that Jerry Yang is on the offensive, accusing Microsoft of trying to destabalize the company without a real desire to complete a deal.  That sounds sort of defensive to me.  Stacey Higginbotham, of GigaOM, offers humorous insight into the Microhoo Saga. [...]

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  8. [...] it’s unclear what this peace offering means for Microsoft, which has expressed interest in doing a deal with Icahn should he gain control of Yahoo. Icahn’s board presence isn’t likely enough to sway [...]

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  9. [...] the plan seems crazy, given the MicroHoo history, Mithras’ small stake (.14 percent) and the current economy, I wondered who the heck Mithras [...]

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  10. [...] By Sebastian Rupley | Friday, October 23, 2009 | 5:00 PM PT | 0 comments | 0 tweets retweet » Activist investor Carl Icahn has resigned from the board of Yahoo, and is praising both CEO Carol Bartz, who just presided over a quarter of improved earnings, as well the rest of the company’s board for “acting so responsibly” in conjunction with the search transaction with Microsoft that he advocated.  Icahn’s resignation was to be expected in the wake of Yahoo and Microsoft inking their deal to collaborate on search (and now that talks of a Microsoft buyout of Yahoo are done), but still marks the end of a particularly political Silicon Valley saga. [...]

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