Yahoo Delays Annual Meeting to Prep for Icahn

Yahoo on May 22 postponed the date for its annual shareholders' meeting, noting in a regulatory filing that it needs more time to prepare for a proxy contest waged by Carl Icahn.

The embattled Internet company, which fought off an acquisition attempt by search rival Microsoft after three months of on-again, off-again negotiations, said in a filing with the SEC (Securities and Exchange Commission) that it will hold the meeting on an unspecified date at the end of July.

Yahoo's move comes after Icahn told Yahoo on May 14 that he was nominating his own slate of handpicked directors to replace Yahoo's current board of directors. Icahn made his move after Microsoft on May 3 walked away from the negotiating table when Yahoo turned down its $33 per share offer for the company.

Icahn, who told attendees at the Ira W. Sohn Investment Conference May 22 that Microsoft would be crazy not to take advantage of the door he opened, is intent on merging Microsoft and Yahoo.

The catalyst behind Motorola's spin off of its flagging mobile device unit and the chief wheel greaser for Oracle's bid to buy BEA Systems, Icahn has developed a taste for trying to balance the scales in the high-tech market.

He believes a union of Microsoft and Yahoo would better tackle Google in the search advertising and broader Internet market, areas most industry experts feel Google will continue to dominate.

For example, despite an alleged recession, comScore research found that Google managed to gain 1.8 percent search market share between March and April, while Microsoft and Yahoo declined .03 and .09 percent, respectively.   

Should Microsoft buy Yahoo, its combined search share would jump from 10 percent to 30 percent, still easily half of Google's current market share. But Microsoft has said it must do something in the face of Google's great growth.

Accordingly, Microsoft and Yahoo are reportedly discussing a deal in which  Microsoft would buy only Yahoo's search business.

Others Options

At the same time, Google and Yahoo are mulling a deal that would put Google's paid search links alongside Yahoo's search results. Such an agreement would reap a reported more than $1 billion per year for Yahoo.

Now Yahoo, which rebuffed Icahn by telling the man he didn't fully grasp the evolution of Microsoft's and Yahoo's negotiations, is circling the wagons as it prepares to battle Icahn and his ad-hoc board, a sortie of business and financial mavens. This slate includes Dallas Mavericks owner Mark Cuban and former Viacom CEO Frank J. Biondi Jr.

Yahoo filed its preliminary proxy materials on May 22, or at least 10 calendar days prior to the date that definitive copies of such materials are first mailed to stockholders.

In postponing its annual meeting, it said it is hoping the SEC will have more time to review and clear its proxy materials. Yahoo is likely trying to work out a defense versus Icahn, or even broker a deal with another company or even Microsoft, which is what Icahn wants anyway.

Meanwhile, Yahoo board member Edward Kozel resigned to move his family to Europe this summer. In light of this, Yahoo reduced the size of its board from 10 to nine directors.