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06.11.08

Microsoft’s Proxy Fight May Have Begun Weeks Ago, Quietly

Posted in BSD, Finance, Free/Libre Software, Microsoft at 1:07 pm by Dr. Roy Schestowitz

Don’t! Tell! Anyone! That! We! Adopted! Mafia! Approach! Against! Yahoo!

A couple of months ago we showed that Microsoft was preparing for a proxy war whose purpose was to unseat Yahoo’s board. This is nothing new. Separate warning came at different times. It did Microsoft some great public relations damage at the time.

Microsoft later confirmed (openly even!) that it was prepared to launch an attack shall an ultimatum be ignored, but it then backed away very abruptly and pretended it had no interest in Yahoo anymore. Then came someone called Icahn out of the blue and suddenly Microsoft expressed some interest in Yahoo again. As the following article (among other sources) ought to teach us, it’s likely that this man is merely Microsoft’s headhunter. Days ago he even admitted that Microsoft needed Yahoo in order to compete. Why is he so concerned and why is he communicating with Redmond now?

Microsoft cops to talking with Icahn on Yahoo

Dispensing with its previous above-the-fray posture, Microsoft has admitted conspiring with talking to activist Yahoo shareholder Carl Icahn, who is trying to oust the Internet company’s board and Chief Executive Jerry Yang for failing to sell out to the software giant.

“Interesting but fully expected,” said one of our readers about this finding.” About the source, though, the LA Times material, IIRC, tends to evaporate over time, so it’s not necessarily the best for a link you plan to return to in a few weeks, months or years,” he added. It ought to be noted that the crossing out at the top came a little while later. The RSS feed said just “conspiring with” when the article got captured (no strikeout).

Target #1 appears to be Yahoo’s brainchild, as cruel as it may seem.

For more of the nasty details of this fight, and the details are illuminating, see my blog “Why Icahn Now Wants to Boot Yahoo!’s Jerry Yang.”

Use of the word “replace” seems to be misplaced. Mind aggressive terminology like “boot” and “kill”. Many people are already getting tired of terms like “dump”, and “<product x> killer” in the press. It’s intended to add drama and inspire fear.

As another new article about this endless Yahoo saga, consider impending lawsuits. We wrote about it the last time. Some of these lawsuits may be backed by Microsoft in one form or another. Encouragement in this case is not illegal (let alone lawsuits by proxy).

In its own filing, the shareholders suing Yahoo say the chairman of its compensation committee is due to be deposed Friday, while another outside director also has been served notice for deposition. Microsoft also has been served with related subpoenas, the plaintiffs say, and “will shortly provide a date for its deposition.”
for trial before meeting

To conclude and describe the situation at hand, consider the following thoughts from a reader (sent in earlier today):


“It appears that he wants Yahoo to destroy itself voluntarily so that Microsoft can hang on as a company for a short while longer.”The nauseating part is that he is pleading for a handout / bailout from Yahoo. It appears that he wants Yahoo to destroy itself voluntarily so that Microsoft can hang on as a company for a short while longer. Just how does that benefit anybody besides Icahn? Since when are profitable companies expected to be liquidated to keep unprofitable money pits (c/f indications of Enron-style money shifting) like Microsoft a float a while longer? I thought everyone in the know had long since sold their Microsoft stock, if they ever had any in the first place.

Let’s ask Icahn if maybe Microsoft is scraping by primarily through buying and selling its own stock.

However, be that as it may, if a main purpose of the bid is to screw with and stress-out Yahoo’s many PHP, BSD and other FOSS developers, then attacking the severance plans makes a lot of sense:

* Worrying about the severance plans and job security reduces productivity, which helps Microsoft by hurting Yahoo and its FOSS projects.

* Removing the severance plans means some staff will bail, disrupting Yahoo and FOSS development, regardless of how quickly staff relocate.

* Removing the severance plans mean that if Icahn is able to hand his Microsoft masters Yahoo, they can mess with the FOSS developers effectively stopping development on projects dependent on those developers.


We will keep an eye on this never-ending story because the impact on Free software can be high.

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