Icahn will be on Yahoo board

By Candice Jones, ITWeb online telecoms editor

Johannesburg, 24 Jul 2008

Dissident investor Carl Icahn and two of his nominees will be appointed to the Yahoo board at the company's next annual shareholder meeting, next month.

Icahn has been aggressively campaigning alongside Microsoft to have the entire board replaced with nominees of his own. This follows failed talks between the software giant and the Internet company.

Microsoft and Yahoo have been at loggerheads since Microsoft first offered to buy Yahoo with a bid of $31 a share at the end of January. Icahn subsequently noted a vote of no confidence with respect to the board and joined with Microsoft to enforce a restructure of Yahoo.

The restructuring would have included the acquisition of Yahoo's search business by Microsoft.

Icahn then bought 59 million shares and share-equivalents of the Internet company and formed a 10-person slate to stand for election against the current board. He now owns 68 786 320 shares, or 4.98% of Yahoo common stock.

Under the new agreement, Icahn has agreed to withdraw his list of board nominees. He will now use his shareholding to vote in support of the candidates the board presents.

"Under the terms of the settlement agreement, eight members of Yahoo's current board of directors will stand for re-election at the 2008 annual meeting: Roy Bostock, Ronald Burkle, Eric Hippeau, Vyomesh Joshi, Arthur Kern, Mary Agnes Wilderotter, Gary Wilson and Jerry Yang," says Yahoo's statement.

Robert Kotick will not stand for re-election. Instead, he will concentrate on his new position as CEO for gaming business Activision Blizzard.

Yahoo CEO Jerry Yang says he is pleased the trouble has passed. "This agreement will not only allow Yahoo to put the distraction of the proxy contest behind us, it will allow the company to continue pursuing its strategy of being the starting point for Internet users and a must buy for advertisers."

Chairman Roy Bostock says the deal is in the interest of the shareholders. "We look forward to working productively with Carl and the new members of the board on continuing to improve the company's performance and enhancing stockholder value."

While Icahn is pleased with his appointment, he is still convinced the company should be sold as a whole to Microsoft. However, international analysts say Icahn's agreement with Yahoo makes it less likely that a deal will be struck with the software giant.