Working under the veil of “shareholder crusader”, Carl Icahn is currently on course to single-handedly destroy two tech giants and leave a third as an unwanted monopoly.
As you can tell, I’m not too happy with Icahn today. This is a man who does not understand the search or advertising businesses at all. As part of his smear campaign against Yang yesterday, Icahn was a babbling idiot as he discussed why Microsoft should buy Yahoo. Basically he reiterated the same ignorant mantra – “the only way that Microsoft can compete with Google is to have Yahoo”. There is no basis for this, and a whole lot of indicators that it is just untrue. Most notable is that the only search market share shrinking more rapidly than Microsoft’s is Yahoo’s.
Icahn is a great businessman. He can spot a company that could be sold for a short-term dollar. But, he doesn’t know how to build products and never has. Icahn’s history shows that he has NEVER built a product. How is it that he knows anything about building a competing search engine to Google? Where does he get these claims? In fact, much more knowledgeable industry experts believe he is 100% wrong.
Icahn is not working in the interest of Yahoo shareholders. Icahn just wants to make a buck. Remember, he can sell yahoo for $26, make $1/share, and put $50 million back in his pocket. He’d then blame Yang and Yahoo for having not sold for more. Well, he knew that Yang had rejected the Microsoft deal before he invested! At this point, his complaining about Yang or the Yahoo poison pill is pure posturing for him to make money. (Has he talked to Yahoo employees? Maybe he doesn’t know that they only reason they didn’t quit already was *because* of that retention plan?)
Unfortunately, Icahn may have already ruined Yahoo’s chances for short-term recovery. If he is successful, he will also ruin Microsoft’s. If the acquisition goes through, the most likely outcome is this: Yahoo and Microsoft will both lose search marketshare during the 1yr transition. Google will emerge as the unquestionable and unwanted monopoly. Consumer choice in search will drop to dangerously few choices. Advertisers will have no online choices. Microsoft shareholders will be left having paid $40B to acquire an asset which was only worth $20B. Nice.
I hope Microsoft comes out with a public statement, “we won’t purchase Yahoo at any price”. This would clearly tell the industry, Microsoft employees and Yahoo employees to stop being distracted by Carl Icahn’s selfish antics. Instead, we could all get back to work so that Microsoft/Yahoo could figure out how to gain market share against Google, and in the end, have 3 healthy, strong companies in the search/advertising markets. Nobody wants a monopoly – not even Google. Don’t let Icahn create one.
Don’t believe a word Icahn says. He doesn’t know how to build companies or products. He only knows how to make money while dismantling them.