Icahn Carl C · DFAN14A · Yahoo Inc · On 7/14/08

Filed On 7/14/08 9:15am ET   ·   SEC File 0-28018   ·   Accession Number 928475-8-260

Additional Definitive Non-Management Proxy Solicitation Material   ·   Schedule 14A
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: DFAN14A     Additional Definitive Non-Management Proxy             4     19K 
                          Solicitation Material                                  

DFAN14A
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SCHEDULE 14A
 Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
(Amendment No. __)

Filed by the Registrant                     [ ]                                 

Filed by a Party other than the Registrant  [x]                                 

Check the appropriate box:                                                      

[ ]  Preliminary Proxy Statement                                                
[ ]  Confidential, for Use of the Commission Only (as permitted by              
Rule 14a-6(e)(2))                                                     
[ ]  Definitive Proxy Statement                                                 
[X]  Definitive Additional Materials                                            
[ ]  Soliciting Material Pursuant to ss. 240.14a-12                             

 Yahoo! Inc.
(Name of Registrant as Specified In Its Charter)

 Carl C. Icahn
 Lucian A. Bebchuk
Frank J. Biondi, Jr.
 John H. Chapple
Mark Cuban
 Adam Dell
Keith A. Meister
 Edward H. Meyer
 Brian S. Posner
 Icahn Partners LP
 Icahn Partners Master Fund LP
Icahn Partners Master Fund II LP
 Icahn Partners Master Fund III LP
High River Limited Partnership
Hopper Investments LLC
Barberry Corp.
Icahn Onshore LP
 Icahn Offshore LP
Icahn Capital L.P.
IPH GP LLC
 Icahn Enterprises Holdings L.P.
 Icahn Enterprises G.P. Inc.
 Beckton Corp.
 Vincent J. Intrieri
 David Schechter
 Mayu Sris
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (check the appropriate box):                              

[X]  No fee required.                                                           

[ ]  Fee computed on table below per Exchange Act Rule 14a-6(i)(4) and 0-11.    

1) Title of each class of securities to which transaction applies:    

2) Aggregate number of securities to which transaction applies:       

 3) Per unit price or other  underlying  value of  transaction  computed
     pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):      

4) Proposed maximum aggregate value of transaction:                   

5) Total fee paid:                                                    

[ ]  Fee paid previously with preliminary materials.                            

[ ]  Check box if any part of the fee is offset as provided by Exchange Act Rule
     0-11(a)(2)  and  identify  the  filing  for  which the  offsetting  fee was
   paid previously.  Identify the previous filing by registration  statement
number, or the Form or Schedule and the date of its filing.           

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DFAN14A
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On July 14, 2008, Carl C. Icahn issued the attached press release  containing an
open letter to Yahoo! stockholders.                                             

ON JULY 14, 2008, THE  PARTICIPANTS  FILED A DEFINITIVE PROXY STATEMENT WITH THE
SECURITIES  AND EXCHANGE  COMMISSION.  SECURITY  HOLDERS ARE ADVISED TO READ THE
DEFINITIVE  PROXY STATEMENT AND OTHER DOCUMENTS  RELATED TO THE  SOLICITATION OF
PROXIES BY CARL C. ICAHN AND HIS AFFILIATES FROM THE STOCKHOLDERS OF YAHOO! INC.
FOR USE AT ITS ANNUAL  MEETING,  BECAUSE  THEY  CONTAIN  IMPORTANT  INFORMATION,
INCLUDING  INFORMATION  RELATING  TO  THE  PARTICIPANTS.  THE  DEFINITIVE  PROXY
STATEMENT AND A FORM OF PROXY IS AVAILABLE TO STOCKHOLDERS  OF YAHOO!  INC. FROM
THE  PARTICIPANTS  AT NO  CHARGE  AND IS  ALSO  AVAILABLE  AT NO  CHARGE  AT THE
SECURITIES  AND  EXCHANGE  COMMISSION'S  WEBSITE  AT   HTTP://WWW.SEC.GOV.   THE
DEFINITIVE  PROXY  STATEMENT AND A FORM OF PROXY WERE  DISSEMINATED  TO SECURITY
HOLDERS ON OR ABOUT JULY 14, 2008.                                              

DFAN14A
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 Carl C. Icahn

ICAHN ISSUES OPEN LETTER TO SHAREHOLDERS OF YAHOO!

Contact: Susan Gordon: (212) 702-4309                                           

NEW YORK,  NY, JULY 14, 2008.  Carl Icahn today issued the following open letter
to Yahoo! shareholders.                                                         

DFAN14A
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 ICAHN PARTNERS LP
 ICAHN PARTNERS MASTER FUND LP
ICAHN PARTNERS MASTER FUND II LP
 ICAHN PARTNERS MASTER FUND III LP
HIGH RIVER LIMITED PARTNERSHIP
767 FIFTH AVENUE, 47TH FLOOR
NEW YORK, NEW YORK 10153
TEL (212) 702-4300

 July 14, 2008

Dear Fellow Yahoo! Shareholders:                                                

Over the years I have attempted to make changes at many companies but I have yet
to see a company  distort,  omit and twist  events and facts in the manner  that
Yahoo! has done in their press release issued Saturday night, July 12th.        

During the last week,  Goldman  Sachs  called me a number of times  asking me to
relate to them any transaction that Microsoft might be interested in transacting
with Yahoo! I discussed with them the  possibility of doing a "Search only" deal
wherein  Microsoft would purchase  "Search" from Yahoo!  and pay Yahoo!  for any
searches that would  originate from a Yahoo!  content page.  Yahoo!  felt that a
deal of this  nature  would be very  interesting,  but only if  Microsoft  would
guarantee the revenue that Yahoo! now received.  This would obviously be a great
deal for Yahoo!  because Yahoo! would, for five years,  receive a minimum of the
$2.3 billion they are  currently  receiving as long as they  continued to supply
the page views and  affiliate  traffic they now had.  Heretofore,  Microsoft had
been  unwilling to even come close to making this  guarantee.  However,  after I
negotiated  with Steve  Ballmer for the better part of a week,  he agreed to the
guarantee.  He also agreed to commit  $7.7  billion  dollars to the  transaction
(consisting of a $1 billion payment for "Search", a $2.8 billion loan and a $3.9
billion  tender offer to Yahoo!  shareholders).  Under the  transaction,  Yahoo!
shareholders would receive $16.25 per share in distributions (consisting of cash
and  securities)  and be left with a content  company which would have a minimum
guarantee of $2.3 billion per year of "Search"  revenue from  Microsoft and cost
saving  synergies  from exiting the "Search"  business that Yahoo!  has publicly
stated would be $750 million per year  (excluding the benefits from reduction of
stock  compensation and other non-cash items).  However,  Microsoft believes the
synergies from Yahoo!  exiting  "Search" would be far superior and that Yahoo!'s
2009 GAAP operating income would exceed $2 billion.  Microsoft would be making a
substantial  equity investment in the remaining company at a valuation of $19.50
per share. Furthermore,  Yahoo! would be spared the great expense of maintaining
"Search" as well as having to spend  billions in  developing  new  technology to
compete with Google and  Microsoft - which it is highly  doubtful  they would be
able to do successfully.  Additionally,  Yahoo! would be able to avoid the great
risk of seeing "Search" continue to lose market share and eventually melt away. 

I spoke to Goldman Sachs and Roy Bostock on Thursday concerning the breakthrough
with Microsoft. A call to discuss the details of the transaction was then set up
among Microsoft,  Yahoo! and me on Friday  afternoon,  July 11th.  However to my
surprise  and  consternation,  on the  Friday  call  Yahoo!,  instead  of  being
interested  in the Microsoft  offer,  seemed to me to be focused on who would be
running Yahoo!.  Finally,  Steve Ballmer suggested that we not spend the rest of
Friday afternoon on corporate governance.  "First tell us if you like the deal,"
he said.                                                                        

THE YAHOO! PRESS RELEASE                                                        

a.   Yahoo!  in their  Saturday  night press release makes much of the fact that
     they were only given 24 hours to decide on the  Microsoft  offer because of
     the time  constraints  relating to the proxy fight, but neglects to mention
     that they were  offered  more time if they would be willing to postpone the
annual meeting for a short period.                                    

b.   Yahoo!  conveniently  neglects  in its press  release to tell you about the
     extremely  important above mentioned  guarantees that Microsoft was willing
to make;                                                              

c.   Yahoo!  tells you in their press  release  that a condition of the deal was
     the  immediate  replacement  of  the  current  board  and  removal  of  top
     management.  Yahoo! neglected to mention we were willing to discuss keeping
a number of the current board members and Jerry Yang as Chief Yahoo!  

d.   Yahoo tells you the Microsoft  proposal precludes the potential sale of all
     Yahoo!  however,  they  neglect  to tell you that  that  train has left the
     station in that  Microsoft is no longer  willing to buy all of Yahoo!  with
the current board overseeing the company.                             

e.   Yahoo!'s press release states that "this odd and opportunistic  alliance of
     Microsoft and Mr. Icahn has anything but the interest of Yahoo stockholders
     in  mind",  raising  the  innuendo  that I am on  Microsoft's  side in this
     manner.  That is patently  ridiculous.  Since Yahoo! failed to consummate a
     transaction  with  Microsoft  this  year,  I have  spent  hours  and  hours
     attempting  to get  the  parties  together  because  I  believe  that it is
     beneficial to Yahoo!  shareholders to have a deal with Microsoft and I have
     worked hard trying to make it happen. It is important to note that my funds
     and  affiliates  own 70  million  shares  of  Yahoo  and own no  shares  of
     Microsoft or Google while the current board outside of Jerry Yang owns only
     the shares they have received from Yahoo for being directors.  My interests
     are aligned with yours and not  Microsoft and I think it is in our interest
     to have  this  transaction  consummated  so that we can get  value  much in
excess of the recent and current market for Yahoo! shares.            

In June, Microsoft apparently made a $33 per share offer for all of Yahoo! which
was  met  with  Yahoo  countering  at $37,  thereby  rejecting  the  $33  offer.
Amazingly,  before  Microsoft  decided that it would not buy all of Yahoo!  with
this  board in place,  it  offered  $33 and was turned  down.  The Yahoo!  press
release  indicates  that Yahoo!,  in rejecting the current  Microsoft  proposal,
stated that it would do a deal in which the entire company was sold to Microsoft
for $33 per share.  It is hard to  understand  why it turned down $33 and is now
willing to accept it. It is the same  obfuscation  that is so  prevalent  in the
rest of the press release. DON'T BE FOOLED.                                     

I believe that,  just like the $33 per share offer that was refused by Yahoo! in
early June,  refusing the Microsoft offer for the Yahoo! search business is also
another  grave  mistake  that  will be deeply  regretted.  Our  company  is on a
precipice  and our Board  seems ready to take the risk of seeing it topple - ARE
YOU, THE REAL OWNERS OF YAHOO!, WILLING TO TAKE THE SAME RISK?                  

The  following  are the details of the offer that was  presented by Microsoft to
Yahoo! on Friday.                                                               

                                           $/share should:
Value to Yahoo! Shareholders                 No Shares Tender  All Shares Tender
----------------------------                 ----------------  -----------------

1.  Yahoo! distributes $12.5B                      $9.00            $9.00       
in Asian Assets                                                         

2.  Yahoo! distributes $3.5B                       $2.50            $2.50       
in cash to shareholders                                                 
Comprised of $1B from                                                   
Microsoft for search, $2.5B                                             
of cash on hand                                                         

3.  Microsoft offers $2.8B in                      $2.00            $2.00       
preferred debt at 5%                                                    

4.  Microsoft tenders $3.9B for                      -              $2.77       
Yahoo! shares at $19.50                                                 

5.  Remaining Shares                              $19.50           $16.73       
$16.73 = effective value of                                           
shares after tender                                                   
(86% x $19.50                                                         

TOTAL VALUE TO YAHOO! SHAREHOLDERS                $33.00           $33.00       
------------------------------------------------------------------------------- 
SEARCH DEAL WOULD  INCREASE  YAHOO!  EBIT TO OVER $2B IN CY09 - REMAINING  SHARE
VALUATION REPRESENTS 14.5 X GAAP PRE-TAX INCOME                                 

o    Microsoft acquires Yahoo! search assets for $1B in cash          
     o    Microsoft is the exclusive provider to Yahoo! and its partners of paid
      search, contextual search and algo search for the term of the deal
o    Microsoft guarantees Yahoo! the greater of:                      
          (a)  85%  net  revenues  for the  first  three  years,  and 70% of net
revenues thereafter, or                           
          (b)  $2.3B  per year of  after-TAC  revenues  scaled  down in event of
             underperformance of Yahoo! US Homepage views and affiliate rev.
     o    At the end of 5 years,  the  agreement  expires  unless  Microsoft  or
Yahoo! exercise one of the following:                       
          -    Microsoft may extend the  agreement for 5 years should  Microsoft
guarantee $3B net revenues per year               
          -    Yahoo!  may extend the agreement for 5 years with Microsoft bound
to guarantee $1.6B per year                       
     o    Yahoo!   no  longer  needs  to  support  the  costs  of  employees  or
infrastructure of the search business.                      
     o    Microsoft will cooperate with Yahoo!  to allow Yahoo!  to collect data
    from its web search to support its display advertising business.
     o    Microsoft will provide Yahoo! with a limited, non-exclusive IP license
        for use of search IP in support of its display advertising platform.
     o    Yahoo!  will  guarantee that  Microsoft's  search will retain equal or
          greater  prominence  throughout the Yahoo! site as Yahoo!  search does
today.                                                      

Steve  Ballmer  has  made it clear to me that if a new  board  consisting  of my
nominees  were  to  be  elected,  Microsoft  would  be  willing  to  enter  into
discussions immediately regarding a transaction along the lines described above.
If and when elected,  I strongly  believe that in very short order the new board
would,  subject to its fiduciary duties, be approving an offer along these lines
for its shareholders.                                                           

 PLEASE VOTE THE GOLD PROXY CARD

Your vote is important. Please act at your earliest convenience.                

If you've already  signed and returned  Yahoo's WHITE proxy card, you can revoke
that vote and cast a new vote by  completing,  signing,  dating and  mailing the
GOLD proxy card today.                                                          

If your shares of Yahoo Common Stock are held for you by a broker or bank,  only
your  broker or banker  can vote  your  shares  and only  after  receiving  your
specific instructions.  In that case, you are asked to complete,  sign, date and
mail the  voting  instruction  form  today.  Please do so for each  account  you
maintain.                                                                       

If you need  assistance  in voting  your  shares,  please call D. F. King & Co.,
Inc., which is assisting us, toll-free at 800-859-8509.                         

Thank you for your patience, cooperation and support.                           

Sincerely,                                                                      

CARL C. ICAHN                                                                   

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