An introduction to Carl Icahn

Jerry Yang meet Carl Icahn, the venerable corporate financier. You may have heard of Mr. Icahn; he’s the rarest kind of shareholder; the one who is able to promote change.

I’m not sure if you’ve run into each other but you’ll get to know the name very well over the next several weeks and months. That’s assuming of course you don’t sell the company you created to Microsoft for a 70% premium or some other similarly generous offer for your beleaguered Yahoo, the company you co-founded in 1994 as an Internet navigational guide with David Filo.

In case your investor relations people didn’t tell you, Mr. Icahn has bought 50-million shares of Yahoo Inc., (he now owns 59-million shares) not coincidentally the shares were bought after you badly overplayed your hand at the negotiating table with Microsoft Corp. earlier this month.

This is where it gets bad for you Mr. Yang. You see Mr. Icahn is used to getting his own way and on his own timelines. Just ask Ed Zander, the former chief executive of Motorola, who was pushed out even though Mr. Icahn failed to secure himself a seat on the company’s board of directors.

Your poor handling of Microsoft’s takeover has Mr. Icahn and other shareholders frustrated as you now know.

As a result, Mr. Icahn is ready to act. He’s just not your typical shareholder who’ll rail at injustice then fade quietly into the Silicon Valley smog. Nope - he has real power; he’s the lightning rod for the frustrated Yahoo shareholders that desperately wanted Microsoft to acquire your company. He wants Yahoo to take the “sensible path” - Icahn said in a letter to Yahoo’s board that of a possible combination with Microsoft if it is to compete against Google.

That means he’s going to be in your backyard, as the saying goes, a lot over the near future. That is until you come to senses and beg Microsoft to come back to the negotiating table. We all know an AOL tie-up isn’t a viable option for Yahoo.

Expect to hear from him a lot. Whether that means simply sitting down at the table again with Microsoft, he’s going to have a big say as to how the company operates from here on in. That means an eventual sale of the company, perhaps over the next three months. Get used to it.

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