JOHN DVORAK'S SECOND OPINION
Carl Icahn will destroy Yahoo
Commentary: Investor's all-stars will first try to deal with Microsoft
By John C. Dvorak
Last update: 6:35 p.m. EDT May 16, 2008

BERKELEY, Calif. (MarketWatch) -- Shareholders of Yahoo Inc. are now being confronted by Carl Icahn and the slate of directors he has to replace the current board. The thinking is that the company's directors screwed up an opportunity to sell to Microsoft Corp.

I've looked over the current directors of Yahoo and Icahn's proposed replacements. Here's what I think of them, keeping in mind that to be on this board it might be useful if you knew something (anything) about computers and the Internet. In some cases, I seriously doubt that the person named even knows how to turn on a computer.

Let's look at them:
Jerry Yang, founder. He should not be the chief executive but should be the chairman of the board. Why isn't he?

Roy Bostock, chairman of the board here and at Northwest Airlines. He's also a director at Morgan Stanley. Sounds like a professional board guy. What's this have to do with the Internet?

Ron Burkle, finance guy and Bill Clinton pal. Burkle's an expert in supermarkets and other things, as well as board member of Occidental Petroleum Corp. What does he bring to the party, knowledge about coal reserves? I doubt he can even use email.

Eric Hippeau. The second of the board members besides Yang who actually knows the business. Negative: He's been on the board the longest and signed off on too many dumb deals.
Vyomesh Joshi, a VP at Hewlett-Packard Co. Are you kidding me? He's from the printing division. What's Yahoo got to do with that?

Arthur Kern. Known as a nice guy. He's been on the board forever and is the new-media guy. Also must have signed off on a lot of dumb deals.

Robert Kotick, chairman and chief executive of Activision Inc. OK, he's in the business. Finally!

Ed Kozel. I could be wrong, but Kozel seems like the real sleeper on the board, with a background in technology as well as finance. He's probably underappreciated.

Maggie Wilderotter. Seems like another lightweight to me; apparently her connection to Microsoft as a former VP is her real allure. She's another professional director who's on various other big-name boards. Must be good at networking.

Gary Wilson, another board member from Northwest Airlines. Yeah, that makes sense. I smell a drinking club!

So this board stinks overall.

That said, at least this group is familiar with the company. Icahn wants to drag in a bunch of out-and-out finance/law guys, along with Dallas Mavericks owner Mark Cuban.

Cuban made his fortune by selling Broadcast.com to Yahoo back in the late 1990s for more than $5 billion. After that it disappeared from view. Another $5 billion down the drain.

Let's look this new group over:
Lucian Bebchuk. Famous corporate lawyer who's an expert in corporate governance. Will serve as the procedural bully on the board.

Frank Biondi Jr. The former Viacom Inc. executive sits on a lot of boards, including Seagate Technology's. He might have a clue but that won't be his job. His job will be to say "yes" to Icahn.

John Chapple. Too many accomplishments to be a real person. Another impressive seat-filler with little or no hook into Yahoo's sort of business.

Mark Cuban. My guess is he's being brought in to be the next chief executive after basketball season is over. Projected tenure? Six months.

Adam Dell. Another VC and finance guy with a law degree.

Keith Meister. He's Icahn's personal economic hit man.

Edward Meyer. Might be OK; at least he knows advertising.

Brian Posner. Another guy with too many items on the "what I did over the weekend" list (see Chapple, above). Do these guys actually sleep, ever, or is this a giant bragfest?

Robert Shaye. Another lawyer-MBA type who also is a Hollywood mogul. Cripes.

Of course, there's Icahn himself as coach/chairman of this all-star team.

Here's the deal: If these guys get on the board, they will first try to package a deal for Microsoft and walk away with more money. If they cannot do that, they will be unable to manage Yahoo since they are all professional place-sitters on everything but Internet companies.

So they will immediately parcel out and sell off the company piece by piece until Yahoo is dead. Looking at the bios of these guys tells you this is something they can do.

And they'll do it fast.
You really don't understand capitalism. Looking objectively, Icahn hopes to turn around UNDER-functioning companies and make better use of their capital (including people). In the end, the intention is that the capital will be used more efficiently?