Yahoo survives by the skin of its teeth

I've been observing Yahoo's situation over the last few weeks and joked like many others I'm sure, that it should be renamed "Yahoo?". In my last post on the subject, several execs had already abandoned ship with more poised to take the plunge. Then deals failed with Microsoft after Yahoo turned down a buy out offer, then went back to that offer which had been taken of the table, and rejected a new offer from Microsoft to buy only their search branch. Complicated, I know.

Even though the deal Yahoo finally agreed on made them more money than selling their search branch to Microsoft would have, shareholders were not happy and stock started to drop in value. That is around the time that Mr. Icahn, who holds 5% of Yahoo's stock, started his campaign to have the entire board replaced with his own nominees at the shareholder's meeting in August. If that plan had gone through, parts of Yahoo would probably have been sold off to Microsoft, however the company managed to defuse the situation by agreeing to appoint Mr. Icahn and two of his nominees to the board.

Thankfully for Yahoo, Mr. Icahn was unable to convince other major shareholders that there was no other option than to sell, so there is no immediate plan for a deal with Microsoft. The main point of conflict was the amounts Microsoft was prepared to pay for Yahoo or just their search branch, which led Yahoo to striking a deal for a new kind of search engine with Powerset.

With the shareholders' meeting just round the corner, it seems that Yahoo will pull through this one and remain under the same leadership for the time being...