Icahn's Accusations 'Patently Untrue', Insists Yahoo Boss

06 June 2008

SUNNYVALE, California: Roy Bostock (pictured), chairman of beleaguered internet portal Yahoo, yesterday hit back at interventionist shareholder and Nemesis-in-waiting Carl Icahn.

Bostock's retaliatory weapon? An eight-paragraph letter, refuting item-by-item the activist shareholder's charges that Yahoo's board had deliberately sabotaged Microsoft's takeover bids. 

Icahn had savaged Yahoo's latest employee program, condemning it as a ploy to saddle Microsoft with massive termination costs for staffers laid-off or who chose to quit if the company was acquired by the software mammoth.

"This could not be further from the truth," countered Bostock. "The plan was adopted in order to protect the value of Yahoo in anticipation of a possible acquisition by Microsoft, which would have resulted in a lengthy regulatory review and a significant period of uncertainty for our employees.

"In adopting this plan, we believe Yahoo did the right thing for its employees and its shareholders alike."

Icahn's assessment of the plan is "just plain wrong", Bostock wrote. Employees would receive severance payments only if the company had been acquired and workers fired "without cause"; or if they resigned for "good reason". Employees who quit under other circumstances would get nothing.

The Yahoo chairman also insisted that the firm had reached out "proactively" to Microsoft, meeting with it many times in the past weeks and that his board remains open to any deal.

"You accuse us of turning down a $40 per-share offer and 'sabotaging' a $33 per-share offer. Again, this is patently untrue.'' Bostock declared he was "unaware" of receiving any bid of $40-per-share.

Amid all the slanging, Microsoft's lips remain resolutely zipped.

  • Meantime, Yahoo continues to expand its display advertising interests via partnering arrangements. Its latest ally on this front is retail titan Wal-Mart

    Although the retailer has long been an advertiser on Yahoo sites (which claim to reach 76% of the US retail audience), the portal has now been signed to sell advertising on Walmart.com, a move that supplements the latter's recently launched free classified service
    Additionally, global marketing services conglomerate Havas this week joined Yahoo's recently-launched Right Media advertising exchange. Havas Digital will use the exchange to enhance its buying and selling ad inventory services.

    Yahoo also plans to introduce an agency-side ad-serving tool within the next twelve months.

  • Data sourced from Bloomberg.com and AdAge.com; additional content by WARC staff