Icahn says he’ll remove Yang as Yahoo CEO

updated 6:53 p.m. ET June 3, 2008

SAN FRANCISCO - Outraged by new details about Yahoo Inc.'s efforts to complicate Microsoft Corp.'s takeover bid, activist investor Carl Icahn says he believes Yahoo's board will have to be fired to lure Microsoft back to the bargaining table.

Icahn asserted in a Tuesday interview with The Wall Street Journal that Microsoft is unlikely to renew its courtship as long as Yahoo Chief Executive Jerry Yang and the company's eight other directors remain on the job.

"I'm very cynical about many of the boards and CEOs in this country, but even I am amazed at the lengths that Jerry Yang and the board went to entrench themselves in this situation," Icahn told the Journal.

Icahn filed plans nearly three weeks ago to lead a shareholder revolt against Yahoo's board, which includes Yang, who co-founded the Internet pioneer 14 years ago.

Yahoo on Tuesday set the date for its showdown with Icahn by scheduling its annual shareholders meeting for Aug. 1 in San Jose. The company has already delayed the meeting twice since the Microsoft saga began.

(Msnbc.com is a joint venture of Microsoft and NBC Universal.)

Until Tuesday, Icahn had been holding out hope that Yahoo's board would avert a shareholder mutiny by renewing talks to sell the Sunnyvale-based company to Microsoft. The software maker withdrew an oral offer of $47.5 billion, or $33 per share, a month ago after Yang sought $37 per share, or about $52 billion.

But Icahn told the Journal he has concluded that Yang and Yahoo's board have antagonized Microsoft too much to get a deal done. He made his remarks after reviewing internal Yahoo records that were unsealed by a Delaware court judge Monday.

Icahn, who has spent more than $1 billion so far to acquire a 4.3 percent in Yahoo, indicated he would give further details on his campaign to overthrow the board in the next day or so. The Associated Press has left repeated messages with Icahn in recent weeks.

In a statement, Yahoo said its board has been "crystal clear" about its willingness to explore any Microsoft proposal that "was in the best interests of its shareholders. To that end, Yahoo has engaged in extensive discussions with Microsoft over the last several months, culminating in Microsoft's decision not to pursue an acquisition of Yahoo. Mr. Icahn's assertions ignore this clear factual record."

A Microsoft spokesman declined to comment Tuesday.

Since the takeover talks unraveled, Microsoft and Yahoo have acknowledged discussing an online search deal that wouldn't meld the two companies together completely. Redmond, Wash.-based Microsoft still hasn't ruled out reviving an attempt to buy Yahoo in its entirety.

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