Everybody Wants a Piece of Yahoo

It seems like everybody suddenly acquired an interest in Yahoo last week, with two different parties launching proxy bids, Google continuing to collude on an advertising deal, and Microsoft suddenly deciding they're still interested. About the only group who haven't been sniffing around Yahoo HQ is AOL, but 10:1 it's just that they've been too busy.

The big story last week was the entry of notorious board-buster Carl Icahn into the fray, with his purchase of somewhere between 50 and 60 million shares of Yahoo, and the announcement that he plans to oust Yahoo's board and install his own. The word from the Yahoo camp was calm and collected, saying they had nothing to fear from a proxy battle, and repeating the official stance that they made all the right moves with Microsoft. The two sides seem decently matched, with Mr. Icahn's victory record and the anger of Yahoo's shareholders lending his side weight, while the board's success at repulsing Microsoft along with the 20% stake in the pockets of founders Yang and Filo bolstering the Yahoo side.

Also offering hope for the beleaguered board is Google, which is still in talks with Yahoo to take over search-based advertising on Yahoo's web properties. A deal is still nowhere to be seen, but insiders keep insisting that it's almost ready, speculating that an announcement could arrive as early as this week. Of course, that means the deal could be in for a regulatory fight as early as next week.

And then, of course, there's Microsoft. Two weeks ago, Evil Incorporated threw in the towel and walked away from the effort to assimilate Yahoo into the Empire. That was supposed to be the end of the saga — though we all knew Microsoft was more likely to release Vista under the GPL than give up on Yahoo. Now they're back, announcing over the weekend that they're in talks with the ! about a deal that would involve...well, something other than a full buyout...probably. So far, they say they're looking to buy part of the company, but won't rule out buying it all — but who knows, given that they've failed to hold to anything they've said so far about Yahoo.

The question left up in the air at this point is: What happens next? With a renewed Microsoft deal possibly on the table, will Icahn move on with a proxy fight? Now that Yahoo is commiserating with the enemy, will Google walk? We just don't know. What we do know, though, is what Microsoft is going to do next — give someone the shaft, because that's what they always do — but we don't know just yet who it'll be.

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