Yahoo still talking to Microsoft
Yahoo Inc said on Wednesday that talks were still on with Microsoft Corp and trumpeted new advertising deals, but failed to appease critic Carl Icahn, who called its board's moves "deceitful."
Yahoo President Susan Decker unveiled new ad partnerships with Wal-Mart Stores Inc and others as Icahn, a billionaire activist investor, stepped up pressure on Yahoo over its rebuff of Microsoft's $47.5 billion (24.3 billion pound) buyout offer, Reuters reported.
And she said some form of deal with Microsoft could still come about, sending Yahoo shares up 2.7 percent for the day, despite Icahn's later blistering, personal attack on Chief Executive Jerry Yang's leadership at Yahoo.
In an invective-filled letter to Yahoo, Icahn used terms like "deceitful," "self-destructive," "misleading" and "insulting to shareholders" for moves by Yang and the board to retain employees in a severance plan likely to make a deal with Microsoft more costly.
He called on Yahoo to rescind anti-takeover defenses and merge with Microsoft, writing that "even I am amazed at the length Jerry Yang and the Yahoo board have gone to in order to entrench their positions and keep shareholders from deciding if they wished to sell to Microsoft."
Icahn has proposed an alternate board ahead of Yahoo's annual meeting on August 1. He told cable business channel CNBC later on Wednesday that "we have good odds" in the Yahoo proxy battle and said an alternate deal in which Microsoft would buy only parts of the company would not serve shareholders.
Decker told the Advertising 2.0 conference in New York that a deal could happen in many forms. "There are ongoing, engaged conversations," she said. "There are many ways in which a combination with Microsoft could be very beneficial."
Talks between Yahoo and Microsoft are focused on arriving at a value for Yahoo's search business, and these discussions are likely to conclude in the "next week or so," a person familiar with the discussions told Reuters on Wednesday.
The two are currently discussing terms of a potential deal in which Microsoft buys Yahoo's search business, the source said.
But some Wall Street investors say Icahn cannot be easily denied. "Carl is a very, very tough adversary to have. They (Yahoo) should have taken him more seriously in the beginning," bankruptcy specialist Wilbur Ross told Fox Business News.
Icahn's latest criticisms stem from a lawsuit filed by two Detroit pension funds that was unsealed on Monday and shed light on Yahoo's response to Microsoft's courtship.
Decker defended Yahoo's severance plan, saying it was meant to keep intact its employee base, a key asset of any deal. She stopped short of saying whether Yahoo's talks with Microsoft concern a full merger or a partial deal.
The person familiar with the matter said executives and advisers from both companies are focusing on establishing a price for Yahoo's search. Some of the finer points under discussion include what Microsoft would pay Yahoo for search queries and traffic acquisition costs, the source said.
Separately, Yahoo continues to talk with Google Inc , and could still end up striking a deal with the Web search giant if it fails to agree to terms with Microsoft, the source said.
Yahoo's new ad deals include a multi-year partnership with Wal-Mart to be the primary ad sales channel for Walmart.com. Yahoo will become the exclusive portal to resell the site's display inventory.
The agreement gives Yahoo a major participant for its new AMP ad management system, a linchpin of the company's strategy to reach outside its own base of users and increase its position as the "must buy" location for online advertisers.
AMP aims to simplify the process of buying and selling online ads for advertisers, ad agencies, fast-growing ad trading networks and website publishers.
In another deal, the digital unit of advertising holding company Havas will work with Yahoo globally on AMP.
A third agreement calls for Yahoo to carry CBS Corp content, like clips from TV shows, as part of a broader plan by the media company to add new outlets for its TV programs.
Yahoo is also adding 94 titles to its newspaper advertising consortium, bringing the total to 779. Among other things, Yahoo provides the technology to serve graphical display ads on the websites of newspapers involved.