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June 16, 2008

For those that don't know Carl Icahn, he is what is known on Wall Street as a corporate raider. Besides his strong interest in Yahoo and a few other large corporations, Icahn is currently embattled in a proxy battle with Motorola and there will soon be others as well.

A few days after the Google / Yahoo proposed deal was finalized last week, Icahn commented a rather unexpected remark, especially coming from somebody who was opposing Yahoo’s decision not to except the Microsoft bid in the first place.

Worse, Icahn has already waged another proxy fight, this time to overthrow Jerry Yang and the rest of Yahoo's executive management board.

Now everybody has the right to have a change of heart, especially if the issue warrants some merit. In an interview with Reuters, Carl Icahn said:

“While Google's proposed acquisition still isn't the same as an offer of $34.38 a share for all the outstanding shares of Yahoo's common stock, I am continuing to study it closely and it might possibly have some merit of some sort. I will let you know soon...”

What's most interesting is what Icahn didn’t mention during the interview, and that's whether or not he will push through with the proxy fight or let the Google / Yahoo deal run its own course of events.

However, and given the conditions of this deal and Google’s good track record on generating strong revenues through online advertising, maybe it would be best for Icahn to let the deal run its due course and see whether it will be favorable to his own current stock holdings in Yahoo.

Additionally, Icahn further commented that a Google deal is preferable than having Microsoft taking control of Yahoo’s search operations. On thing that Mr. Icahn may have liked about the proposed Google / Yahoo transaction was the provision on change of control whereby Google can always walk away from the deal if Yahoo is acquired by another company...

This whole thing is interesting to follow, and on more than one front, since Icahn is a pro at doing this, at least there are some that think that.

Whatever happens out of all of this, the industry and Google especially is hoping that a stronger and 'better' Yahoo will be good for search, and hopefully will present some strong features for its users.

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    This article was featured on Business 5.0.

Source: Google.