The final countdown
Microsoft boss Steve Ballmer is clearly running out of patience with the Yahoo! board and has decided to deliver an ultimatum in the form of a letter to the board: do a deal in the next three weeks or face a proxy battle.
This is a threat the current Yahoo! board should take seriously as a proxy battle involves trying to convince existing shareholders that the board should be replaced by one that will accept the deal – something said shareholders would presumably be happy to do it they like the deal.
‘If we are forced to take an offer directly to your shareholders, that action will have an undesirable impact on the value of your company from our perspective which will be reflected in the terms of our proposal,’ said Ballmer.
In essence, he seems to be saying: ‘Playtime’s over; it’s time to get serious,’ and is assuming that shareholders won’t like the prospect of getting less for their shares.
To ensure there is no doubting his intentions, Ballmer stated: ‘If we have not concluded an agreement within the next three weeks, we will be compelled to take our case directly to your shareholders, including the initiation of a proxy contest to elect an alternative slate of directors for the Yahoo! board.’Playtime’s over; it’s time to get serious
He also made it clear that he is unimpressed with some of the Yahoo! board’s responses to Microsoft’s offer. ‘…you have adopted new plans at the company that have made any change of control more costly,’ he said.
This would have been at least partly in reference to the measure, introduced on the 20th February, which gives Yahoo! execs two years full salary in the event of there being a change of who controls Yahoo!
Yahoo! shareholders could be forgiven for suspecting that the Yahoo! board is more interested in protecting itself than delivering value to shareholders – it’s supposed sole reason to exist. The board includes execs from HP and Activision as well as Yahoo! CEO Jerry Yang.
Securing his legacy
A report posted on the Yahoo UK & Ireland news site says that ‘Yahoo boss Jerry Yang, whose company once allegedly helped Chinese police nab and jail cyber dissidents, is today in the forefront of a global campaign to free those languishing in prison for expressing their views online.’
Allegedly? The Yahoo Human Rights Fund was set up in November 2007 to settle, out of court, a lawsuit brought by the families of human rights protestors Shi Tao and Wang Xiaoning, who were jailed thanks to confidential information provided by Yahoo to the Beijing dictatorship; allegedly.
AFP reported today that the fund is managed by Harry Wu, who spent 19 years in labour camps for the sin of criticising the Peking regime and now lives in the States. Wu would not discuss how much money Yahoo has contributed. ‘I'm not sure how much of an impact we will have,’ he said, ‘but we will try.’
Meanwhile Yahoo’s Chinese website, operated by China-based Alibaba (of which Yang is a board member), last week posted pictures of 19 people wanted by authorities for protesting in the Tibetan capital of Lhasa. The Alibaba deal was made when Yahoo was due to be grilled by Congress for betraying subscribers.Is Alibaba worth the price it will exact from Microsoft’s reputation?
ZDNet’s Larry Dignan asked a very acute question last week, with reference to Microsoft’s bid for he ailing internet giant: ‘What’s Yahoo worth to Microsoft without Alibaba?’ I have another question: Is Alibaba worth the price it will exact from Microsoft’s reputation?
The Chinese dictators are not as immune to outside pressure as some seem to think. AFP reports they have unblocked the English language versions of Wikipedia, BBC News and Google’s Blogspot.
The minor relaxation may be a gesture in response to a demand by the International Olympic Committee that the internet must be open and uncensored for the 8-24 August duration of the summer Olympic games.
On the same day, cyber-freedom hero Hu Jia was sentenced to three and a half years imprisonment for ‘subversion of state power’. Hu’s crime was to post six articles on the internet.
But the international media will have internet access and live broadcast feeds in August, so that’s alright.
Update - 09:00 7th April: A 'person familiar with the matter' has told Reuters that Yahoo! can write stern letters too. Apparently it's going to send one back to Microsoft today asking for more money.
This is clever on one level as it will weaken Microsoft's arguement that the Yahoo! board is not acting in the best interests of the shareholders, but could still backfire if Microsoft calls its bluff and proceeds with a proxy fight in three weeks anyway - which is what it's most likely to do.