Posted 08/16/08 at 08:09:01 PM by Justin Kerr

What would you do with a multi billion dollar war chest? Well if your Microsoft, you try and buy up the largest search engine you can afford. But ever since Microsoft failed to convince the stubborn Jerry Yang to sell Yahoo, investors have been scratching their heads wondering, what will Microsoft do with all that money? A potential answer emerged last week in the San Francisco Chronicle with the news that Microsoft may spend as much as $20 billion to buy back its own shares within the next three months. Analysts believe this to be in response to its lagging share price which went from a 52 week high of $37.50 to as low as $24.87 by shareholders who worried Microsoft was overpaying for Yahoo. Investors may also be concerned that if buying Yahoo was plan a, plan b is something they should genuinely be worried about. Buying back shares should help push Microsoft’s stock price back up, and buy a bit of good will with shareholders. Tim Allen, analyst and portfolio manager at Wentworth, Hauser and Violich expressed relief that Microsoft was “not going to do something crazy”. The hope is that by reducing the number of shares in the market, earnings per share will increase and stock value will climb as a result. This doesn’t always happen, but is a pretty safe bet with a company like Microsoft that has a steady income stream. Microsoft shares closed down on Friday at $27.81.

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Posted 07/15/08 at 09:18:24 AM by Chris Moody

It seems that Yahoo’s recent rejections of a Microsoft offer with a short deadline, has spurred on investor Carl Icahn to proceed with his attempt to replace Yahoo’s current board, including Chief Executive Jerry Yang.

In a note written to Yahoo shareholders Icahn said, "Our company is on a precipice and our board seems ready to take the risk of seeing it topple".

Yahoo Chairman Roy Bostock and Chief Executive Jerry Yang wrote, "We are prepared to let you, our stockholders, not Microsoft and Carl Icahn, decide what is in your best interests and we look forward to the upcoming vote".

Recent gains that Yahoo stock had made on hopes that Ichan could broker a deal fell 4.2% on Monday’s trading.

It seems the showdown is on for the August 1st shareholders vote. You can catch more details here.

Will Yahoo be assimilated? Is resistance futile? Sound off, and tell us what you think!

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Posted 07/07/08 at 06:20:43 PM by Pulkit Chandna

Carl Icahn should feel at home in boardroom coups, after having fashioned a few of them. Along with experience, he has tenacity and a never-say-die attitude, which is rearing its head in the aftermath of Microsoft’s deal with Yahoo. While some people attribute the breakdown of (doomed-from-the-start?) talks between the two tech giants to company culture clash, Icahn is trying his best to agitate Yahoo stockholders into a revolt against the company’s board. Icahn’s fresh missive to Yahoo stockholders claims Microsoft is still interested in buying Yahoo’s search engine business or the entire company.

He reports to stockholders that Microsoft's CEO has personally conveyed his distaste for the current Yahoo board, and so, wouldn’t enter any negotiations with the incumbent board. Ballmer wasted no time in confirming Microsoft’s interest in “a major transaction with Yahoo, such as either a transaction to purchase the "Search" function with large financial guarantees or, in the alternative, purchasing the whole company." But he made it amply clear that negotiations would be resumed only after a new board of directors is elected.

Yahoo wants Microsoft to prove its seriousness and make an offer immediately, if it’s interested in a deal. The company warned in its response that it doesn’t believe a deal – with a new board in place - would be in the best interest of Yahoo stockholders.

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