Oh, the drama at Yahoo!

I’m not sure why any of us bother to watch staged reality TV shows when the real drama is unfolding before our very eyes in the form of Yahoo and Microsoft letters.
In the latest open letter to Yahoo Chairman Roy Bostock, billionaire investor Carl Icahn on Wednesday used the words "deceitful," "self-destructive," "misleading" and "insulting to shareholders" to express his frustration with what he sees as the "inordinate lengths" the company has gone to in keeping Microsoft from buying Yahoo.
Icahn's letter was sparked by details disclosed earlier this week in a lawsuit filed by Yahoo shareholders who disagree with the way Yahoo handled Microsoft’s recent $44.6 billion acquisition offer. Icahn wrote that Yang and other board members used unnecessary tactics, including a costly severance plan for Yahoo employees, to “entrench their positions and keep shareholders from deciding if they wished to sell to Microsoft," citing details from the shareholder suit.
He said that merging with Microsoft is the "only way to salvage" the company. "It is insulting to shareholders that Yahoo for the last month has told us that they are quite willing to negotiate a sale of the company to Microsoft and cannot understand why Microsoft has walked away," Icahn wrote. "However, the board conveniently neglected to inform shareholders about the magnitude of the plan it installed which made it practically impossible for Microsoft to stay at the bargaining table."
The company’s next shareholder meeting is Aug. 1, and Icahn has said he'll try to oust CEO Jerry Yang and others if they don’t change their ways. "It may be too late to convince Microsoft to trust Yang and the current board to run the company during that period while Microsoft sits on the sidelines with $45 billion at risk. Therefore, the best chance to bring Microsoft and Yahoo together is to replace Yang and the current Yahoo board with a board that will negotiate in good faith with Microsoft," he added.
Yahoo resisted the attack, saying in its reply letter that Icahn's criticism "seriously misrepresents and manipulates the facts.”
Icahn may want to get rid of Yang, but it will be hard to find a cheaper CEO. Yahoo's proxy filing cites Jerry Yang's salary in 2007 as $1, with no accounts of other compensation. Of course, he owns 3.9 percent of the company, but that would be his regardless.

-- Michelle Savage