Legal Commentary

Yahoo's board has reached an agreement with investor-advocate Carl Icahn.  Icahn will drop his proxy challenge, and he and two others will join the Yahoo board.  One member of the current board will exit and two new board slots will be created, moving the board from nine members to eleven.  Icahn and former AOL CEO Jon Miller have been tabbed to join, leaving a slot for one of Icahn's original slate of ten. 

Silicon Alley Insider tries to put a good spin on the move:

If you're so inclined, you could view this as Jerry and co caving: If they were ultra-confident that they were going to win the proxy vote next month, they wouldn't have given Carl a thing. On the other hand, they can now go back to the business of trying to fix/save Yahoo, and get an experienced Internet mind (Miller's) to offer some advice. That seems like a pretty good trade to us.

Plus, they hopefully can keep Icahn from his officious meddling.  To me, that's the best reason for the deal -- quiet things down and get the spotlight off of management.  Also, Icahn won't be looking to sell his big stake as soon as possible.  But the move may also signal Yahoo's willingness to sell itself.

Regardless, I'm disappointed that Icahn's inept proxy battle has ended with him on the board.  What message does that send?  It must be demoralizing to Yahoo employees.  They have no real voice in the company's future, but they have to sit on the sidelines and watch as a wealthy investor buys some stock, trashes the company, and gets put on the board -- all in the space of two months.  And he doesn't even use email.

Of course, the question now becomes: who from the slate of Icahn directors will take the one remaining spot?  As a professor, I hope Lucian Bebchuk is the nominee.  But part of me hopes it's Mark Cuban.  After all, I'd love to keep using this quote: "Is there anything more fun than sitting around, growing your hair, drinking a Bud while listening to Jethro Tull and pondering how to change the balance of power in the search world and unseat Google ?"