Mr Icahn has blogged his thoughts on the article, tearing the journalist’s (though I doubt he thinks she’s worthy of the noun) opinions apart with fact, insight and obvious relish. All in all it’s a lesson in dressing down with style. A couple of snippets for you:

“...the article was so wrongheaded that I am surprised that it was afforded an appearance in a premier business newspaper. I hope better academic guidance is provided for students in California than that exemplified in the editorial.”
“To imply that these companies’ balance sheets are anemic and debt-strapped is simply not the case. I truly hope Ms. Stout reviews the facts and corrects this kind of distortion that is used to bolster her already weak arguments… Motorola has approximately $7 billion in cash on its balance sheet.”

Reading his blog, you get unbridled access to his thoughts (granted on limited subjects) and are left with the clear impression that this is no absentee businessman. I'm sure he plays golf, or sails, or collects art like others who can afford to, but I bet he knows every inch of his organisations' KPIs - he probably wrote them.

Former Viacom CEO Frank Biondi and former Nextel CEO John Chappel will join Carl Icahn as the newest additions to Yahoo's board.

All eyes are on Icahn and his gang. The three amigos will need to start making changes to placate shareholders soon because if they don't, it's likely that nobody on the board will. The three were part of Icahn's original proxy slate that ran under a campaign to sell Yahoo (YHOO) to Microsoft (MSFT). Icahn dropped the fight in July in exchange for three seats on the company's board.

Shareholders are still waiting for Yahoo to come up with a plan that will drive up the stock. Since mid-June, when Yahoo announced that talks with Microsoft were over, the stock has dropped roughly 20% in value and has hovered in the low $20s. Microsoft had originally offered to buy Yahoo at $31-a-share. Earlier this month investors re-elected Yahoo's eight incumbents. But investors signaled their unhappiness with CEO Jerry Yang and chairman Roy Bostock. Yang received 66.3% of the votes while Bostock received the least, with 60.4% votes.

Wall Street isn't convinced that Icahn and co. can do much to turnaround Yahoo. Says Thomas Weiser Partners analyst Christa Quarles, "Yahoo needs someone to help fix the business, and I don't know if Icahn has the background to do that."

Icahn has yet to reveal what his plans are to drive shareholder value for Yahoo beyond selling part or all of the company to Microsoft. The corporate raider has most recently pushed for management change at Blockbuster (BBI) and Motorola after securing board seats at those companies. Last year, Blockbuster CEO John Antioco agreed to step down after Icahn initiated a campaign to cut his salary. After Icahn won two seats on Motorola's board in April, he persuaded the company to dump its cell phone division and was instrumental in pushing out former CEO Ed Zander.

Chappel, who is president of Seattle-based private equity firm Hawkeye Investments, was unavailable for comment. Biondi, a senior managing director of private equity firm WaterView Advisors, responded in an e-mail that he does not comment on boards that he serves. Biondi is currently a director of five other boards, including Seagate (STX) and Cablevision Systems (CVC).

♦ Scandalul expoziţiei de dejecţii patronate de Institutul Cultural Român nu ar trebui să se oprească la o simplă trepidaţie, mai ales că poliţia americană, deşi nu a descoperit principalul corp delict (poneiul roz cu o zvastică, retras între timp din expoziţie), continuă cercetările. Doar protestele previzibile ale Ligii Antidefăimare mai lipseau din CV-ul României. Dar cum să schimbe preşedintele Băsescu de la conducerea ICR pe unul dintre cei mai aprigi linguşitori ai săi?

♦ Jerry Yang a rămas la conducerea grupului Yahoo!, al cărui fondator este. Complotiştii grupaţi în jurul lui Carl Icahn, favorabil acceptării ofertei de cumpărare avansate de gigantul Microsoft, au fost zdrobiţi de votul acţionarilor. Arsenalul lui Carl Icahn: racolări, mituiri, promisiuni. Zadarnic. Fronda nu a avut sorţi de izbândă. Succesul lui Jerry Yang este şi succesul consiliului de administraţie, care şi-a păstrat nealterată componenţa. În consecinţă, colaborarea cu Google se deschide spre perspective mai ample. Succesul lui Jerry Yang înseamnă însă şi continuarea declinului pe piaţa chineză, întrucât acţionarii au respins moţiunea privind înfiinţarea unui comitet pentru drepturile omului, care să protejeze confidenţialitatea datelor. În 2004, disidentul anticomunist Shi Tao a fost arestat de poliţia chineză pe baza datelor oferite voluntar de grupul Yahoo! serviciilor de securitate de la Beijing.

Neff is U.S. chairman of Spencer Stuart, the firm that dominates the market for U.S. board searches. Spencer Stuart has recruited directors for giants like Wal-Mart (WMT), IBM (IBM), AIG (AIG), and General Motors (GM). In his spare time, Neff has conducted CEO searches at Merrill Lynch (ML), Sprint Nextel (S), and Boeing (BA).

"More and more board candidates are saying that it's just not worth it," Neff says about the challenge of recruiting star executives for corporate boards. Since Sarbanes-Oxley became law in 2002, a typical corporate director's time commitment has risen sharply. "I'd say by 50%," he estimates, to about 200 hours a year. And for a troubled company (that's most companies these days!), reputation can be a major turnoff. "Who wants to have their picture, along with a dozen other directors, in a New York Times story about a company in trouble?" Neff asks.

Moreover, compensation often doesn't make up for the hassle. After Sarbanes-Oxley was enacted, director pay increased some 15% annually, Neff says. It's still rising, but at a much lower rate. Today a directors at the top tier of Fortune 500 companies typically pocket about $200,000 a year.

So companies are forced to be flexible. Some are moving board meetings to easy-to-access locations -- say, from a small town where a company is headquartered to a major metropolitan city. The biggest companies provide air transport for directors. "Retired CEOs who had their own plane typically won't join a board if the company doesn't provide a private plane to the meeting," Neff explains.

Indeed, retired CEOs and big swinging shareholder activists. Remember when Carl Icahn forced his way onto the board of Blockbuster (BBI)? Icahn, who doesn't like to leave New York City, got Dallas-based Blockbuster to move its board meetings to his hometown. That's power.

P.S. For more on Neff and his longtime headhunting rival, Gerry Roche of Heidrick & Struggles (HSII), see my 2005 Fortune story, Clash of the CEO Kingmakers.

Oil billionaire T. Boone Pickens has decided he is not going to follow activist billionaire Carl Icahn to the ends of the earth.

Pickens told the San Francisco Chronicle that he has sold his 10 million shares of Yahoo (YHOO) for a loss because he doesn't believe a sale to Microsoft (MSFT) is happening.

Pickens bought the shares in the hopes that Icahn would succeed in getting Yahoo's board to agree to a sale to Microsoft. The octogenarian admits he doesn't know how to "write an email" and decided to blindly follow Icahn's lead. "He goes in first and I jump in behind him," Pickens told CNBC in an interview in late May.

Icahn's plans to sell the tarnished Internet portal to Microsoft for a profit have not succeeded. The corporate agitator launched a proxy campaign in hopes of winning control of Yahoo's board, but Microsoft has said the company is no longer interested in buying all of Yahoo for $33-a-share. Earlier this month Icahn reached a compromise with Yahoo's board to forgo his proxy fight in exchange for three seats on Yahoo's board. Yahoo will holds its annual shareholder meeting on Friday, where investors will vote for an extended 11-member board.

Now that the fight's over, Pickens has decided to cut his losses. "I think that [the] Yahoo management was pathetic," Pickens told the Chronicle. Pickens did not say how much he has lost in his activist gamble.

Though the most recent regulatory filings don't show Pickens's selloff, it's likely that Pickens has lost roughly $50 million. He bought his shares in the first few weeks of May when Yahoo was trading between $25-$27. In the past two weeks, Yahoo's stock has slipped to between $20-$22.

Ummm, hello?  "Mars"?  Try, "vastly improves".  Or, "makes watchable".  I hope one of the board members Carl Icahn installs knows something about sports...

Adobe, in a somewhat foolhardy quest to develop and establish its own media distribution creds, has now updated its Media Player with a new interface, and added full length movies from Sony Pictures...also added are new shows from CBS, including episodes of Beverly Hills 90210, 48 Hours, The Love Boat. About 600 shows and 25,000 individual episodes are available in all in AMP. (http://www.paidcontent.org/entry/419-new-adobe-player-adds-sony-movies-still-trying-harder 7/21)

I’ve said it before but I’ll say it again, I have download fatigue.  The product has to be an unbelievable game-changer at this point for me to take the time to download it.  In most cases, I forget to remove the program and clog up my machine like a impenetrable drain.  Speaking of which, I should go remove Google Lively. . .

TiVo and Amazon.com may be getting one step closer to the marketing dream of using a TV remote control to order products being advertised or promoted on a talk show or commercial. TiVo today will unveil a "product purchase" option that will link to products being pitched by guests on a handful of popular talk shows, including Comedy Central's "The Daily Show." (The New York Times 7/22)

Ousted AOL chief Jon Miller is a candidate for one of the two open board seats activist investor Carl Icahn gets in a deal avoiding a battle for control of Yahoo. Miller could even end up running Yahoo if pressures to oust CEO Jerry Yang continue. (http://news.yahoo.com/s/ap/20080721/ap_on_hi_te/yahoo_miller 7/21)

Ongoing talks about a deal for AOL between Time Warner and Internet giants Yahoo, Google and Microsoft have heated up since Microsoft's bid to acquire Yahoo was rebuffed by Yang in July. Those talks may further intensify, now that Yahoo may no longer be in play. (http://www.smartmoney.com/breaking-news/ON/index.cfm?story=ON-20080721-000487-1624 7/21)

MySpace is rolling out a couple of announcements this morning a day ahead of Facebook’s F8 developer conference. The first is confirmation of our story that they are supporting OpenID, although they aren’t releasing any details (It’s our belief that they will first issue OpenID IDs, and possibly become a relying party later).  The company is also announcing the launch of two new Data Availability integrations: Flixster and Eventful (we built what we believe is the first Data Availability app last month). (http://www.techcrunch.com/2008/07/22/myspace-confirms-openid-support-launches-data-availability-on-flixster-and-eventful 7/22)

Justin.tv, one of the first live video streaming sites, has announced its 1 millionth registered user since its launch in March 2007.  Justin.tv has a number competitors, namely Stickam, Mogulus, and Ustream.tv, but has managed to keep a strong presence in the space (maintaining attention along the way with a number of media stunts). We’ve analyzed the competition several times. (http://www.techcrunch.com/2008/07/21/justintv-reaches-1-million-users 7/21)

Looking to become a conduit for other companies that want to get into the online-video arena, Comcast unit thePlatform has announced a series of deals to help other cable providers gain a toehold in the emerging market for Internet content. ThePlatform, a Seattle company that Comcast acquired two years ago, said it would begin delivering video to high-speed Internet subscribers with Time Warner Cable, Cablevision and Cox Communications. (The Wall Street Journal 7/22)

New York attorney general Andrew Cuomo is notifying Comcast that the state will take legal action if the company doesn't block access to adult content that features children. Comcast, the No. 2 U.S. Internet service provider, says it will take action. (http://www.washingtonpost.com/wp-dyn/content/article/2008/07/21/AR2008072102623.html 7/22)

I put the phrase "activist investor" in quotes because it's something of a euphemism, sort of like "freedom fighter" when used in association with the word "Afghanistan."

Be that as it may, I'm sure there is nothing but smiles and capitalist fist-bumping going on in the streets and corridors of Sunnyvale, where Mr. Icahn's insights into the daily management of the Yahoo business organization will, I am sure, be most welcome, as will be the pleasure of his affable and reticent company.

Sometimes when an important visitor or new associate comes to call, it's tough to figure out how to prepare for the great event. Here are a few thoughts on how Mr. Yang and his associates might work it out:

1. As a statement on how seriously Mr. Icahn takes the various strategic options facing the company, fellow board members could don conical caps with elastic chin straps and greet his arrival with the tooting of little paper horns. Confetti will be optional.
2. As an expression of fiscal restraint, lunch should be served on paper plates. Plastic spoons and forks are advisable. While Spam is not required, mid-shelf cold cuts should suffice.
3. In recognition of Mr. Icahn's expertise as an operating executive, every piece of paper generated by the company's various segments should be deposited in a polite pile by his seat. A subsequent meeting should be set up immediately to glean wisdom based on his command of the details.
4. During all board meetings, an open conference call line should be established between the Yahoo board room and the office of Microsoft (MSFT) CEO Steve Ballmer in Redmond, Washington, to avoid confusion and lack of clarity in subsequent communications.
5. While it is almost certain that Mr. Icahn, with limited experience with the Internet and its many challenges, will take a low profile at board meetings, management and the existing board should make sure to listen carefully to anything the new member has to say, in the unlikely event he is moved to speak on any given issue, and to avoid the impulse to blurt imprecations. A fresh perspective from a smart source untarnished by jaded experience is always valuable.
6. Under no circumstances should Mr. Icahn or any of his associates be offered any financial incentive to go away. This would obviously be a highly insulting move, since he has joined the board as an activist dedicated to the well-being of fellow Yahoo shareholders everywhere and by no means for personal lucre.

Those are just some initial thoughts. I'm sure Mr. Yang and his team are coming up with more and better ones even as we speak.

The only thing surprising about the resolution between Yahoo’s board of directors and activist investor Carl Icahn was that it didn’t happen sooner.

The proxy campaign that Icahn launched nearly three months ago to eliminate Yahoo’s board and replace it with his own cronies at the Aug. 1 shareholder meeting came to an end Monday when the two sides finally agreed to a compromise. Proxy experts say they expected a settlement, which will give Icahn three seats on an expanded 11-member Yahoo (YHOO) board, several weeks ago.

“The end game was fairly obvious. It should have been obvious that the company wasn’t going to pitch a shutout. At the same time, it should have been obvious to Carl that he would be unlikely to get a majority vote,” said Chris Young, the M&A research director of shareholder advisory firm RiskMetrics ISS. “This was a recipe for a settlement.”

Neither side was likely to win without a compromise. Young says Yahoo’s board and Icahn were both preparing for the “nightmare scenario” – a full Yahoo slate or an all-Icahn slate that appealed to few Yahoo investors. Both slates were too extreme for disenchanted shareholders who were unhappy that Yahoo’s current board botched negotiations with Microsoft (MSFT) and wary that Icahn’s directors do not have a Plan B beyond a sale to the software giant.

Young suggests that Icahn would have likely submitted a shortened version of his nine-member slate before the Aug. 1 meeting. Last Friday Bill Miller, a major Yahoo shareholder with Legg Mason, said he would support Yahoo’s incumbent slate, which includes CEO Jerry Yang and chairman Roy Bostock, over Icahn’s. However, Miller also signaled he’d be willing to support Icahn as a board member. “We believe it is appropriate for large shareholders to have representation on corporate boards if they so desire,” Miller said in a statement. Icahn Associates owns a 5% stake, or 68.7 million shares, of Yahoo, making him the third largest institutional shareholder.

A shortened Icahn slate could have spelled trouble for Yahoo’s board. Since 2006, activists have succeeded in winning seats through proxy fight or settlement 80% of the time, according to RiskMetrics. Yahoo is among 40 large-cap companies that have reached a settlement with activists in the past year, and is the third largest behind Kraft Foods (KFT), which settled with Nelson Peltz by adding two Peltz-backed nominees to the board last November and Target (TGT), which reversed its longstanding position to sell off its credit card receivables after activist Bill Ackman started rattling cages.

A settlement that gives Icahn a seat on Yahoo’s board is a “win-win situation,” Young said. “Nobody likes to go to the bitter end. This way, nobody loses face. Everybody can claim victory and address the most important issue – creating shareholder value.”

The deal gives Icahn and two other board members of his choosing spots on an 11-member board. Shareholders will choose from Icahn's previously named slate of potential directors and newly named Jonathan Miller, currently a partner in Velocity Interactive Group and former chairman and CEO of AOL. This will settle the proxy battle Icahn began after Microsoft's failed bids for Yahoo earlier this year, and make the Aug. 1 shareholder meeting a less contentious one.

However, 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 Microsoft to put up the cash required to do a deal that Yahoo might sabotage while waiting for the closing. We'll update the story as Microsoft comes out with its stance.

Carl Icahn and Yahoo have come to a settlement over control of Yahoo’s board. In return for three board seats, Icahn has agreed to withdraw his alternative slate of nominees and back down from a full-fledged proxy war. Icahn will be given a seat on the board, existing board member Robert Kotick (CEO of Activision) will step down, and the board will be expanded to 11 members from the current ten. The two resulting empty seats will be determined by vote, filled from Icahn’s alternate slate of directors and giving him three seats on the new board. Former AOL CEO Jonathan Miller will also be eligible to take one of the empty seats, and likely will. (http://www.techcrunch.com/2008/07/21/icahn-backs-down-from-yahoo-proxy-fight-in-return-for-three-yahoo-board-seats 7/21)

iLike, the music service with a massive following on Facebook and increasing popularity elsewhere, has introduced full-song playback on its flagship site, iLike.com. Through its partnership with music subscription service Rhapsody, the site will be offering over 5 million songs from all of the major labels and a variety of indie artists, too. In conjunction with the launch of full song playback, the site is also launching a new self-serve ad platform for concert promoters. (http://www.techcrunch.com/2008/07/20/ilike-launches-full-song-playback-and-ad-platform 7/20)

This is mad hott.

Watching full-length shows online won't destroy television viewership, according to a study commissioned by CBS. The study of 50,000 people, conducted by Magid Media Labs, finds that 35% of online watchers say they are now more likely to watch CBS on TV after finding shows online. (Iwantmedia 7/21, http://blogs.reuters.com/mediafile/2008/07/21/online-viewing-wont-kill-tv-cbs 7/21)

Time Warner's struggle to sell AOL is putting more pressure on the media company's stock price as the advertising slowdown spreads to the Internet and the pool of potential buyers shrinks. According to one investor, AOL has "become yesterday's story in the Internet world." (Iwantmedia 7/21, http://www.bloomberg.com/apps/news?pid=20601204&sid=a7mbfoBX3u.c 7/21)

Facebook is unveiling a redesign to reflect changes in how its members communicate. Users now are apt to exchange just one-sentence, Twitter-style messages. (Iwantmedia 7/21, http://news.yahoo.com/s/ap/20080721/ap_on_hi_te/facebook_facelift 7/21)

Napster, the Internet music pioneer whose shares have plunged 95% in six years, is seen as takeover bait for hedge funds zeroing in on a cash hoard exceeding the company's market value. Napster controls half of all U.S. online-music subscriptions and is seen as "dirt cheap." (Iwantmedia 7/21, http://www.bloomberg.com/apps/news?pid=20601103&sid=aoh.JuHEG690 7/18)

NBC will try out incoming "Late Night" host Jimmy Fallon in brief, 5- or 10-minute nightly segments on the Internet, starting this autumn, long before the young comedian replaces Conan O'Brien, who will leave the show to take over the "Tonight" show from Jay Leno next year. (Iwantmedia 7/21, http://www.nytimes.com/2008/07/21/arts/television/21fallon.html?_r=1&oref=slogin 7/21)

Viacom's MTV is now airing clips it exclusively premieres at least a half-dozen times during a single three-hour weekday video block. MTV exec Brian Graden calls the strategy "hyper-saturation," and views the move as a way to get ahead of online outlets like YouTube in influence. (Iwantmedia 7/21, http://www.nypost.com/seven/07202008/business/carpet_bombing_videos_120747.htm 7/20)

Google exec David Eun and Web pro Mark Cuban are to appear as panelists for a field hearing that the U.S. Federal Communications Commission is holding Monday to discuss "the future of digital media." Another FCC panel will probe "the broadband of tomorrow." (Iwantmedia 7/21, http://www.variety.com/article/VR1117989161.html?categoryid=1009&cs=1 7/21)

Barry Diller's IAC/InterActiveCorp is signing agreements to raise almost $2 billion to finance the spinoffs of three divisions, part of a plan to break up the company. The deal will leave $1.3 billion to invest in its Ask.com search engine, acquisitions and emerging Web sites that IAC develops. (Iwantmedia 7/21, http://www.bloomberg.com/apps/news?pid=20601204&sid=apFvWJlZQbyc 7/18)

Is Yahoo Serious?- A blow was dealt to Yahoo usurper Carl Icahn today when Legg Mason announced they would back Yahoo in a takeover bid.  Legg, which disclosed it owns 60.7 million shares of Yahoo, or 4.4 percent of outstanding shares, urged Yahoo and Icahn to settle their differences ahead of Yahoo's August 1 shareholders meeting.  If Microsoft wants to acquire Yahoo, it can make the terms and conditions of its offer public," Legg said in a statement. "If Yahoo shareholders support it, I am confident the board of Yahoo will accept it " (Technology:  Is Yahoo Serious). The firm's portfolio manager Bill Miller told Reuters last week Icahn would have more support if he promised not to sell Yahoo below $33 per share. He also urged Microsoft Corp (MSFT.O) to make its offer public.  Legg backed Yahoo's actions since Microsoft made its $47.5 billion offer to buy Yahoo public earlier this year.  Okay?  What does Legg Mason know about the tech industry?  Aren't they the company that sponsors professional tennis matches and yacht racing?  Obviously that tool Jerry Yang, Yahoo's CEO, made some hefty promises to the folks at Mason or the hostile takeover would have come long ago.  Yang is dilirious if he thinks he can usher in the coming years as captain of Yahoo's wheelhouse.  He has single-handedly dragged the worth of his company to the bottom of the barrell due to his stubbornness and flighty visions.  If Yahoo's shareholders want to stay afloat as a privateer in a huge market they need to get rid of that geek Jerry Yang and the rest of his merry, pocket-protector pals, and that includes Legg Mason.  As of now, there aren't too many suitors interested in the fleeting company, or a battle with Icahn and Microsoft.  Google is drowning in finacial woes as stocks plunged today and nobody else has the liquid assets or minerals to step up and match Microsofts' offer, whether it be private or public.  Get serious Jerry.  Take the money and open up an internet cafe in the Bahamas.  If you don't you'll be serving coffee and donuts from a street cart in Frisco.

The latest installment is a letter to shareholders from Yahoo CEO Jerry Yang that accuses Microsoft of flip-flopping, creating confusion and generally not wanting to make a deal. The letter also also reiterates Yahoo's desire to sell the entire company at $33 per share -- or if that's not interesting, just the search assets.

Let me tell you, Yahoo, playing hard to get is smart, but this letter is no way to get the guy of your dreams. In fact, rumor has it Microsoft is seeing AOL now, and everyone knows AOL hasn't always made the best choice in relationships.

This stuff may play well in Silicon Valley, but outside of it the world is not watching. While Kara Swisher dutifully calls her sources and provides us with the ins and outs of the wheeling and dealing, the audience outside the tech world is yawning. This started back in February (2007 if you believe the original offer from Microsoft). Let's finish this, so the world can really focus on the banking crisis or high gas prices.

.

For starters, the software giant's search-only proposal "did not include changes to Yahoo's governance."

In other words, it was Icahn, the other half of Microsoft's joint proposal, who was asking for all Yahoo board members and top management to resign immediately. But even Icahn, in his letter to shareholders Monday, noted he was willing to discuss keeping some of the Yahoo directors around, and even founder Jerry Yang as "Chief Yahoo."

Microsoft also contends its sweetened offer has been incorrectly portrayed as a "take it or leave it ultimatum," rather than a "timetable" to push negotiations forward. Yahoo, in its investor presentation, notes that Microsoft gave the company only 24 hours to consider its proposal.

Here is the text of Microsoft's statement:

On the evening of July 12, Yahoo Inc. released a statement relating to recent discussions involving Yahoo, Microsoft Corp., and Carl Icahn. Microsoft believes the statement contains inaccuracies that need to be corrected. Among other things, the enhanced proposal for an alternate search transaction that we submitted late Friday was submitted at the request of Yahoo Chairman Roy Bostock as a result of apparent attempts by Mr. Icahn to have Microsoft and Yahoo engage on a search transaction on terms Mr. Icahn believed Microsoft would be willing to accept and which Microsoft understands Mr. Icahn had discussed with Yahoo.

Specifically, on Thursday afternoon, July 10, Mr. Bostock called Steve Ballmer's office to arrange a call. On that subsequent call, Mr. Bostock told Mr. Ballmer that "with substantial guarantees on the table and an increase in the TAC (traffic acquisition cost) rate, there are the pillars of a search only deal to be done." Mr. Bostock encouraged Mr. Ballmer to submit a new proposal to Yahoo! for a search-only deal reflecting these terms.

After considering Yahoo's request and taking into account Yahoo's previous feedback about our prior search proposal, Microsoft determined late Friday to propose an enhanced search transaction. This proposal included significant revenue guarantees, higher TAC rates, an equity investment and an option for Yahoo to extend the agreement over a 10-year period.

Microsoft's proposal did not include changes to Yahoo's governance.

At the time Microsoft submitted its enhanced proposal, Microsoft asked that Yahoo confirm whether it would agree that the enhancements were sufficient to form the basis for the parties to engage in negotiations over the weekend on a letter of intent and more detailed term sheets. This discussion has been mischaracterized as a take it or leave it ultimatum, rather than a timetable in order to move forward to intensive negotiations. Yahoo informed Microsoft on Saturday that it had rejected the proposal.

After making all that fuss about bringing an offer, Yahoo spurned another proposal from Microsoft on Saturday, this one brought jointly with Carl Icahn as a 24 hour take-it-or-leave-it ploy. The deal called for a complex restructuring of the company that would have given Microsoft control of Yahoo's search business and what was left to Icahn and his dissident slate of replacement board members. So in other words, they were asking Roy Bostock and Jerry Yang to sell off its most valuable asset then fire themselves. And Microsoft sent a man they view as a shameless corporate raider as the messenger. In its rejection letter Yahoo dismissed the proposal as "erratic and unpredictable" and questioned Mr. Icahn and his alternative board members' ability to run the technology firm in the wake of such a fire sale. (Cynopsis 7/14)

In the background throughout Microsoft’s neverending Yahoo courtship has been the News Corp factor. Yahoo ran to Google to avoid an MS tie-up first time ‘round; could it also seek solace in Rupert Murdoch’s arms? It’s “very unlikely”, Rupe said (via Reuters) at Allen & Co’s Sun Valley shindig. (http://www.paidcontent.org/entry/419-murdoch-on-yahoo-microsoft-will-walk-away-deal-with-us-unlikely 7/11)

Time Warner's AOL is "definitely looking prettier" to both Yahoo and Microsoft this morning, as the latest round of talks by the tech giants to partner in some way have collapsed yet again. AOL is described as "the number two choice of both of them." (http://kara.allthingsd.com/20080714/is-jeff-bewkes-now-the-belle-of-the-microhoo-ball 7/14)

TechCrunch is said to be in off-and-on acquisition talks with Time Warner's AOL. Heather Harde, CEO of the tech industry blog founded by Michael Arrington, says: "My policy is not to comment on rumors." AOL acquired Jason Calcansis's Weblogs Inc. in 2005. (Iwantmedia 7/14,http://kara.allthingsd.com/20080711/paidcontents-rafat-ali-speaks-so-heres-whos-next/ 7/11)

If behavioral targeting is the great hope for display advertising on the Web, can it work for videos as well? Web video startup Veoh thinks it can and is bringing its behavioral targeting advertising program out of beta today. The ads are targeted at one of nine groups, including viewers interested in action videos, cars, pop culture, sci fi, anime, and family fare. (http://www.techcrunch.com/2008/07/14/veoh-targets-video-ads-based-on-past-viewing-patterns 7/14)

Viacom wants to know which videos YouTube employees have watched and uploaded to the site, and Google is refusing to provide that information. The dispute is said to be the reason the two companies have failed to reach a final deal on anonymizing the personal data of YouTube users. (Iwantmedia 7/14,http://news.cnet.com/8301-1023_3-9989783-93.html?hhTest=1 7/12)

VH1 will pay tribute to The Who on Tuesday streaming sneak peek performances by Pearl Jam, Foo Fighters, The Flaming Lips, Incubus and Jack Black's Tenacious D taped on Saturday at UCLA, two days before the performances air in a tribute show on July 17. Rainn Wilson will host the coverage on Rock.VH1.com, featuring an exclusive jam session with The Who.  Additionally VH1 has launched a new Facebook app called VH1 Framed You, allowing users to insert their own images in photos and videos of rock stars. It's sort of digital version of those cut outs you see at beach. (Cynopsis 7/14)

I advise not adding the Facebook app which only gives you a few frames to choose from.  Among them, only 1 is female.  Lame.

Chelmsford, MA-based online music discovery service OurStage unveiled a new matchmaking tool to help musicians find and apply for gigs. The OurStage Marketplace will work in conjunction with promoter Live Nation using the site's user-based "Mojo" rating system to help national bands scout up-and-coming local acts to open their shows. The system will serve venues in New England, Denver and the San Francisco Bay Area to begin with. (Cynopsis 7/14)

Walt Disney Co. in October will release a 50th anniversary edition of the classic "Sleeping Beauty" animated movie on Blu-ray disc. The disc will showcase a half-century of progress in consumer-electronic technology: It will enable viewers to interact with each other via a new system called BD Live that links the disc with the Internet. (The New York Times 7/14)

Kevin Martin, head of the U.S. Federal Communications Commission, says he will seek "enforcement action" against Comcast for slowing down heavy Internet users who are downloading movies and other large data files. The cable giant used "too blunt an instrument," says Martin. (Iwantmedia 7/14, http://www.philly.com/philly/news/homepage/24585014.html 7/12)

This puts a lot of pressure on Jerry Yang though. He has to look in the Google deal again, the alternative he has, unless some one else wants to jump in. They say The deal with Google has got a better monetary value and also lesser risk. And why not? Carl Icahn (an investor who bid for Yahoo along with Microsoft) had asked for the ouster of the entire top management of yahoo, if the deal got through. Google on the other hand promises a cash flow of $450million in the first year itself. No wonder or surprises in it. Google leads the online search engine marketing revenues by far.

Microsoft on the other hand might have received a shot in the butt :-P they have been trying to woo Yahoo for far too long, since the $44.6 billion bid by Steve Ballmer 6 month back was rejected. They have tried several times. However the trick here is, Yahoo doesn't seem to like to idea of seperating the search business from its core. Microsoft on the other hand has no interest other than the search engine as they are getting desperate to improve their position in SEM.

Well all eyes are on Carl Icahn now, as he tries to woo some more before the yahoo Share holders meeting next month. (Carl Icahn is one of the 9 board members of Yahoo)

Good Luck to Jerry Yang!

Yahoo announced Saturday night that it rejected a joint-buyout proposal that Microsoft and investor activist Carl Icahn offered the night before, which called for a "complex restructuring" and sale of Yahoo's search business to Microsoft.

The joint proposal, issued Friday night, gave Yahoo a 24-hour turnaround to accept or reject the renewed offer. It called for Microsoft to buy the search business and Yahoo to swap out its board members for Icahn's dissident slate, who would then have control in running the remainder of Yahoo's businesses.

Microsoft did not have an immediate comment Sunday morning.

Yahoo's board, after consulting with its legal and financial advisers, rejected the offer Saturday night based on a number of factors, including:

Yahoo's existing business plus its recently signed commercial agreement with Google has superior financial value and less complexity and risk than the Microsoft/Icahn proposal.

The Microsoft/Icahn proposal would preclude a potential sale of all of Yahoo for a full and fair price, including a control premium.

The major component of the overall value per share asserted by Microsoft/Icahn would be in Yahoo's remaining non-search businesses which would be overseen by Mr. Icahn's slate of directors, which has virtually no working knowledge of Yahoo's businesses.

The Microsoft/Icahn proposal would require the immediate replacement of the current Board and removal of the top management team at Yahoo. The Yahoo Board believes these moves would destabilize Yahoo for the up to the one year it would take to gain regulatory approval for this deal.

Yahoo said in rejecting the offer it told Microsoft it was willing to sell the entire company for at least $33 a share and its board believed such a deal could be negotiated and executed before its annual shareholders meeting on August 1. Yahoo said it also informed the software giant it remained willing to negotiate an "improved search only transaction."

Microsoft, however, rejected both offers, Yahoo stated.

Yahoo did not disclose the financial terms that Microsoft and Icahn were willing to offer in the proposal.

Icahn, which is running a proxy fight against the Internet search pioneer to unseat its board at its annual shareholders meeting, delivered the proposal to the search pioneer.

And although Yahoo's board "acknowledges that the current proposal contains a number of improvements over Microsoft's earlier proposal," the Yahoo board's believed this latest proposal is not in its shareholders best interests. It cited these issues:

The revenue guarantees suggested, which are conditional and subject to reduction, are well below the search revenue that the company is expected to generate on its own and in association with its announced commercial agreement with Google. That agreement alone is estimated to generate $250 to $450 million of incremental cash flow for the first twelve months following implementation, while allowing Yahoo to remain a principal in paid search.

The success of the remaining company is critically dependent on Microsoft's ability to effectively monetize search.

Microsoft/Icahn's proposed Traffic Acquisition Costs rates are below market.

The proposal calls for Yahoo to sell its industry-leading algorithmic search business and its related strategic and valuable intellectual property portfolio for no incremental consideration.

Many of the components of the headline value that Mr. Icahn and Microsoft put forward, such as the spin-off of the Yahoo's Asian assets and the return of cash to stockholders, are steps that could be taken by Yahoo on its own and the board continues to evaluate these options.

Yahoo Chairman Roy Bostock characterized the efforts by Microsoft and Icahn as "erratic and unpredictable" and said that it would be "absurd and irresponsible" for the Internet search company to engage in a complex deal that would remove half of its business and do it without Microsoft dealing directly with the company's management.

"Microsoft and Mr. Icahn are trying to dismantle the company and deliver our search business to Microsoft on terms that would be disadvantageous to Yahoo stockholders. We are prepared to let our stockholders, not Microsoft and Carl Icahn, decide what is in their best interests and we look forward to the upcoming (shareholders) vote," Bostock said.

According to a report in The Wall Street Journal, Microsoft initiated discussions with Yahoo:

The proposal came together in recent days. Microsoft's general counsel Brad Smith initiated the talks with a phone call to Ron Olson, the lawyer for Yahoo's independent directors a few days ago, according to a person familiar with the matter. Subsequently, Microsoft CEO Steve Ballmer, Mr. Icahn and Roy Bostock, Yahoo's chairman, discussed the proposal over several phone calls, this person said.

That move apparently came despite a statement by Microsoft on Monday that it "concluded" it could not reach agreement with Yahoo's board and it would be interested in discussing either a search only acquisition, or purchase of all of Yahoo, with a new board.

And on Friday evening, according to a report in The New York Times, Icahn and Ballmer made their proposal. The Times further notes Yahoo's board and advisers discussed it in a meeting that lasted between four to five hours.

Microsoft's sweetened search buyout offer, a concept CNET News first reported on three weeks ago that the software giant was considering, showed improvements over its initial search offer to Yahoo that was worth $9 billion.

One improvement, according the Wall Street Journal, included revenue guarantees that would span five years, compared with its previous offer of three years.

Posted by Dawn Kawamoto
CNET NEWS.com

Maybe it's the Board of Directors, maybe it's Jerry Yang, maybe it's both of them - probably it's the overall lack of leadership at Yahoo! but I could swear, and Danny Sullivan now points out, that the deal Yahoo! wants to do with Microsoft was the exact one they offered in the first place, last May ... according to SearchEngineLand -  Yahoo Rejects Joint Microsoft/Icahn Deal But Open To $33 Per Share All-Microsoft Sale

I think Yahoo! did the right thing by buying IndexTools and (Yahoo! Analytics) but that's the only thing I can think of recently, they did right.  Danny Sullivan details the recent history of the the Microsoft - Yahoo! negotations (see below):

• First Offer - Microsoft Buys All Of Yahoo (Jan-May): Microsoft
  makes an offer
  to buy all of Yahoo on January 31, which is
  rejected about
  two weeks later.
• Microsoft counters that
  it will pursue a hostile takeover, if necessary, and calls its proposal
  "full and fair." By April, Microsoft gave Yahoo a three week deadline to
  accept its proposal. For its part, Yahoo
  started
  evaluating a paid search deal with Google. Meanwhile, Yahoo and Microsoft
  start negotiating a higher price for Yahoo. But the price wasn't high
  enough for Yahoo, and Microsoft
  pulls the  offer in May.
• Second Offer - Microsoft Buys Yahoo Search (June): Yahoo
  continued to negotiate a paid search deal with Google, while Carl Icahn
  started buying shares of Yahoo to launch a fight for control of the
  company. The general idea was that he'd get a new board in that would favor a deal
• with Microsoft -- that is, if Microsoft was still interested in Yahoo. AndMicrosoft was interested, given that it started talking directly to Yahoo.
• This time, it wanted just Yahoo's search assets. In the end, Yahoo chose to work
  with Google instead, keeping its search business but also carrying Google
  ads in addition to its own.
  Yahoo's Google &
  Microsoft Deals, Side-By-Side explains both offers Yahoo considered,
  in some detail. By
• Third Offer - Microsoft Buys Yahoo Search; Icahn Takes Control Of
  Yahoo (July): As covered above, Microsoft would get Yahoo's search
  assets while Icahn would run Yahoo.

At this point, I have to wonder why Microsoft doesn't go back and offer
Yahoo the price it wants for the entire, keep the search portion and divest
the rest to Icahn. Crucially, Yahoo apparently offered the entire company
for $33 per share, which was what Microsoft was willing to pay in May
(rather than trying to get the $37 per share that Yahoo wanted):

I think the reason why Yahoo! went back and forth is that Yang is a weak CEO, he could not make a strong case and sell the Board on his vision - and everything spiriled out of control.

Some people are just not cut out to be a CEO.

The pitched battle between billionaire investor Carl Icahn and Yahoo for control of its board could hinge on whether Icahn can convince the company’s two largest institutional investors to vote for his alternate slate of directors. Those two investors are Gordon Crawford of Capital Research and Bill Miller of Legg Mason. As of May 7, they each controlled 16 percent and 6.7 percent of Yahoo stock, respectively. Icahn owns at least 4 percent. That’s more than a quarter of the voting shares between the three of them. (http://www.techcrunch.com/2008/07/09/legg-masons-miller-to-icahn-put-up-or-shut-up 7/9)

Google is getting into another me-too service, and about a year or so after the Second Life bubble burst: it has launched Lively, its virtual world/avatar service, with the twist being users can embed these avatar and worlds into their own blogs and social networking sites such as Facebook. (http://www.paidcontent.org/entry/419-google-tries-to-go-lively-with-its-own-virtual-world-effort 7/8)

As YouTube struggles to make money on advertising, according to a story today in the Wall Street Journal, and reportedly may resort to pre-roll ads (which consumers hate, but advertisers love), maybe they should take a look at some of the innovative ad units coming out of VideoEgg. Today, VideoEgg is launching five new kinds of Web video ads. (http://www.techcrunch.com/2008/07/09/videoegg-launches-new-video-ad-units-maybe-youtube-should-pay-attention 7/9)

Online ad tracking service NebuAd is being called before a panel of Senators today to address privacy concerns regarding its targeting methods. The hearing, which will also call officers and lawyers from Microsoft, Google and Facebook, is the result of vociferous complaints from groups such as The Center for Democracy and Technology and the FTC's Consumer Protection Bureau, which will also testify at the hearing. (Cynopsis 7/9)

The Office junkies will be pleased to know the second series of original webisodes will go live from tomorrow at 3 pm ET on NBC.com. This season, sponsored by Comcast, Sony Electronics and Priceline, will revolve around Kevin (Brian Baumgartner) as he tries innovative ways to pay back his looming gambling debts. (Cynopsis 7/9)

Independent video sharing site Dailymotion saw unique visitors increase by 18% month-over month in May to 5.7 million uniques, according to ComScore. (Cynopsis 7/9)

Viewers are consuming more video than ever before thanks to the proliferation of content on multiple screen and devices, according to data released from Nielsen, the first time the company has compared viewing across TV, the internet and mobile. Instead of one platform suffering, they all seem to be benefiting. The average user (2+) is watching more TV than ever before (4% more compared to May of last year.) A small but growing number of internet and mobile phone users are watching video online (2 hrs, 19 min per month), as well as on their cell phones (3 hrs, 15 min per month).  (Cynopsis 7/9)

• 220 million Americans have internet access at home and/or work and 73%, or 162 million went online in May
• 119 million unique viewers watched 7.5 billion video streams in May 2008
• As of Q1 2008, 91 million Americans (36% of all mobile phone subscribers in the U.S.) owned a video-capable phone

Time Spent in Hours: Minutes Per User 2+, Per Month
May 08   May 07  % Diff
Watching TV in the home*            127:15    121:48     4%
Watching Timeshifted TV*                5:50       3:44   56%
Using the Internet**                     26:26      24:16     9%
Watching Video on internet**           2:19       n/a      n/a
Watching Video via Mobile Phone       3:15       n/a      n/a
* TV includes live viewing plus any playback viewing; Timeshifted TV is playback primarily on a DVR but including playback on services like Start Over as well as playback from a DVD recorder.
** Internet figures are from home and work.  Hours:minutes are based on the universe of persons who watch online video.
Source: Nielsen