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Yahoo Lobbies for Investor Confidence

As it struggles to fend off a proxy war for control of the company, Yahoo's leadership (NASDAQ: YHOO) has made another pitch to investors, taking aim at activist investor Carl Icahn's "ill-defined plan" and urging shareholders to vote for the incumbent board of directors at the upcoming annual meeting.

Coming in advance of the company's Aug. 1 shareholder meeting, the presentation (available as a PDF here) also defends the company's ultimate decision to ink an ad deal with Google (NASDAQ: GOOG) over any of the transactions discussed with Microsoft (NASDAQ: MSFT).

"The vote you will cast for directors at Yahoo's annual meeting is the most important for stockholders in our history," Yahoo told investors on the annual meeting page of its Web site.

Yahoo spokesman Brad Williams told InternetNews.com that the presentation would be used in a series of meetings with its larger investors beginning today and carrying through next week.

Today's presentation follows a letter to shareholders dated last Thursday -- the same day the company announced a major internal reorganization -- as the latest in a series of attempts by Yahoo to prove that its turnaround strategy is working.

"Despite all the challenges we've been through, including Microsoft's unsolicited proposal and now a proxy contest by Carl Icahn, Yahoo remains a unique value proposition," CEO Jerry Yang said in a statement.

Yahoo characterized Microsoft's position throughout the acquisition deal talks as "unresponsive and inconsistent," and even questioned how serious the software giant was about the buyout.

"The record casts doubt on whether Microsoft was ever committed to a whole company acquisition," Yahoo said.

Microsoft did not respond with a comment by press time.

After talks about a full acquisition by Microsoft broke down, the two companies continued to discuss an alternative deal. Under that agreement, Microsoft would have bought Yahoo's search business and taken a 16 percent equity stake in the company. In its latest appeal to investors, Yahoo claimed that deal would not have delivered the same value as the Google tie-up.

The deal also carried a 10-year exclusivity clause that would have given Microsoft veto power over major company decisions.

Yahoo said it challenged Microsoft on the terms of the agreement, charging that its promises overstated the real value that it would bring to the company, while boxing it into a binding contract and effectively forcing it out of the search business.

The Google deal, which has yet to take effect, preserves a higher degree of flexibility for Yahoo.

The two companies said they would give the Department of Justice three and a half months to review the deal, though no regulatory approval is required since it is not an acquisition. However, regulators are still expected to take a close look at the two Internet heavyweights' transaction.

Pressing forward with its attempt to discredit Icahn's ability to restore value to Yahoo's shareholders, the presentation also offered a chart tracking the stock performance of companies that he has attempted to influence. Shares of 11 of the 15 companies he has tangled with since Dec. 2004 have declined, Yahoo said. Three have gone up, and one is unchanged.

Icahn's office did not return a request for comment.