The Big Picture Part II: Yahoo and Microsoft's Saga

In Part 1, Microsoft attempted to takeover Yahoo, but withdrew after discussions proved unfruitful. In this installment, Carl Icahn rides in to resurrect the deal and investors start to line up behind him. Will Jerry Yang and his crew fall to the Icahn raiders? We'll find out soon enough.

May 3, 2008: After four months of phone calls, sit downs, dueling press releases and letters, Steven Ballmer officially withdraws Microsoft's offer to acquire Yahoo. (Source: microsoft.com)

May 5, 2008: Billionaire investor and hostile takeover veteran, Carl Icahn begins to increase his ownership of Yahoo stock.

May 15, 2008: Carl Icahn sends a letter to Yang and the Yahoo board excoriating them for their refusal to accept Microsoft's offer of $33-per-share claiming it offered substantial value to the Internet portal's shareholders. Icahn proposes his own slate of directors initiating a proxy contest for control of Yahoo. Despite Icahn's bid, Microsoft says the decision to withdraw its offer for Yahoo has not changed. (Source: iht.com)

May 18, 2008: Microsoft releases a statement saying it will consider a transaction with Yahoo that does not include a complete takeover of the company. Ends the statement with the caveat: "There of course can be no assurance that any transaction will result from these discussions." (Source: microsoft.com)

May 20, 2008: Details emerge about Microsoft's new proposal for Yahoo. According to reports, Microsoft would purchase Yahoo's search-advertising business, force the Internet portal to sell off its Asian assets and then hold a minority stake in the stripped down company. Analysts don't buy it, and see it as a coy position as the software company waits for Yahoo to come back to the bargaining table.

May 21, 2008: More investors line up behind Carl Icahn. The Chairman of BP Capital, T. Boone Pickens, gobbles up 10 million shares to support the hostile takeover bid, and Daniel Loeb, under the banner of his company Third Point LLC, grabs up 1 million shares to go along for the ride.

Less than two months from now, on July 3, the business community will hold its breath as Yahoo's shareholders meet to elect a new board in what may become the most contested proxy battle in recent memory. Icahn's slate of board members includes a mix of heavy hitters from the investment and entertainment worlds, and of course Mr. Icahn himself. Whether they can woo enough shareholders over to their side is unknown. But every day Yahoo shareholders jump ship like a Hillary Clinton delegate. For a complete list of Icahn's proposed board click here.