Yahoo To Icahn’s Takeover Letter: We’re Just Fine, Thank You Very Much

Dear Carl. We here at Yahoo
got your letter
telling us how much we suck. We think you suck more And let us tell you why. That’s
the short summary of Yahoo’s
response to
Carl Icahn’s letter yesterday telling Yahoo he will fight to oust their board
and do a deal with Microsoft, assuming Microsoft is still willing. Plus, Yahoo
does a deal with WPP on ad exchanges.

The Yahoo letter goes back to its view of negotiating with Microsoft,
including highlighting things we’ve heard rumored to happen before, the last
offer $33 from Microsoft given orally, Yahoo countering with $37, and Microsoft
saying to have picked up its toys and walking out without a counter-offer.

That history, along with the rest of the letter, seeks to build a case that
Yahoo’s board has indeed diligently worked to get a deal representing fair
shareholder value and that, unlike what Icahn believes, Yahoo can still gain
value on its own.

In other news, hedge fund Paulson & Co, which recently built a 3.4% stake in
Yahoo,
says
it will support Icahn. I wonder if they built that large stake up before the
deal was announced or after? And if they did it after, um, they’ll complain
Yahoo didn’t do a deal that maybe would have made them more money versus if
they’d been long-time investors rather than short-term gamblers. Just saying —
maybe they did have a long-term stake, of course.

Want to know more about the folks Icahn’s putting up? Forbes has a nice

rundown on them. I like that you’ve got a former CEO of Gray Global from
1970-2006 billed as having experience that could help Yahoo with online search
advertising. Because those traditional agencies soooo got search advertising
years ago, right? Mark Cuban is fun — guess we can expect him to bribe sites
as he proposes
to block Google from crawling them. Heck, Mark — Yahoo’s the only player with
paid inclusion. Don’t stop at walling the web off from Google — offer to give
everyone top rankings if they do it, too!

Speaking of partnerships, Yahoo’s

just announced it has

partnered with WPP. In the deal, WPP’s agencies will be able to put their
clients out on Yahoo’s Right Media display ad exchange. And WPP will get Yahoo
working with it to develop a "WPP Marketplace" that combines with WPP’s 24/7
Real Media so that WPP clients and potentially third parties can buy and sell
ads.

And if that all sounds confusing, hey, it is to me, too. But then, the
"partnership" with Publicis & Google announced last month was pretty hard to pin
down as well. See
Publicis & Google In Technology, Media-Planning Partnership for more on
that.

For more discussion,
see here on Techmeme.