After weeks of almost daily conference calls – and months after firing its CEO – Yahoo’s board meets again today.
They will deal with – and perhaps accept – a number of offers to buy parts of or all of the company.
Their decisions today will determine the fates of thousands of Yahoo employees, thousands more shareholders, and millions of users.
Cofounder Jerry Yang wants to do a deal where Yahoo would issue a bunch of new stock and then sell it to a selection of private equity firms allied to his interests. Yahoo would then use the proceeds from that sale to buy Yahoo stock back from the public. This would consolidate his control of Big Purple. This is called a PIPE deal.
It should be a pipe dream. It's beyond us why anyone would bet good money on giving Jerry Yang another shot at saving Yahoo. He's already been CEO and he failed at that. Then he picked his friend, Carol Bartz, to replace him.
Says one source close to Yahoo execs: 'The whole scheme is so Jerry can remain in control. It's not good for anybody. We're going to get sued out the yin yang. It's going to dramatically dilute the rank and file. People are going to flee.'
Yahoo board member David Kenny doesn't like the PIPE deal Yang is putting together.
He's allied himself with PE firm Heldman & Friedman to try and come up with an alternative. If H&F walks away with control of the firm, it will probably make Kenny CEO. That would be a great move for Yahoo.
When he was at Digitas, Kenny had Yahoo has a client, so he understands the brand and how to sell it to Madison Avenue. Sources also say Kenny has a firm grasp on what's wrong with Yahoo's disparate product offerings.
Kenny has publicly denied his interest in becoming Yahoo CEO, but he's had to do that because he is an independent board member.
One source close to Kenny said the denials are similar to the way presidential candidates will deny interest in running until its obvious that they have a chance to win the nomination.
Famed Internet entrepreneur Marc Andreessen, now a powerful partner at Silicon Valley venture capital firm Andreessen Horowitz, has allied with PE firm Silver Lake and taken a long look at buying a controlling stake in Yahoo.
Andreessen would become executive chairman.
Kara Swisher first reported, and we can confirm, that Andreessen has even met with Yahoo executives to discuss what it will take to turn around the company.
A source close to people at that meeting say its pretty clear Andreessen is not optimistic about Yahoo's chances.
Likewise, this source is not optimistic that Andreessen will do the deal.
'He's got investors. He's got everyone looking at him. If he comes in and the thing doesn't do well, he's now taken his time away from all of his other investments. If it does work is he going to be any bigger than he already is?'
After taking OpenTable through a successful IPO, CEO Jeff Jordan quit to become a partner at Andreessen Horowitz earlier this year.
Before his stint at OpenTable, Jordan was a top executive at eBay and PayPal.
He joined Marc Andreessen at his meetings with Yahoo executives, and would almost certainly become its Yahoo's CEO if AH took a stake.
Former News Corp COO Peter Chernin has allied with private equity group Providence Equity Partners to make a run at taking control over Yahoo.
Chernin has long coveted Yahoo.
The last big deal PEP and Chernin did together was the funding and launch of Hulu. Yahoo made a run at buying Hulu before the current saga made that kind of deal untenable and Hulu's parent companies pulled it off the table.
At Yahoo, Chernin would work with another News Crop alum, Amercias boss Ross Levinsohn.
Jack Ma is the CEO of Alibaba, a big successful Chinese Internet company in which Yahoo owns a large minority stake.
These days this stake -- and Yahoo's piece of Yahoo! Japan -- make up a majority of Yahoo's value.
That means Jack Ma has a lot of leverage in the on-going negotiations.
The one thing he really wants out of this whole deal is independence from Yahoo, and to buy back its stake in Alibaba.
Ma has not committed to a private equity firm yet. He has talked to everyone, but it is most likely his partners will be some combination of Blackstone, Providence, and THL.
Steve Ballmer's number one priority for Microsoft's online business efforts is search.
A huge part of Microsoft's steady (costly) market share growth in search has been its partnership to power Yahoo search.
Microsoft needs Yahoo to remain a healthy company that has an online product that continues to attract hundreds of millions of users.
It will happily join an investment in the company to make sure that happens.
Reports say Microsoft has allied itself with Silver Lake, but a source close to Yahoo says Microsoft has not yet decided which PE firm has the best plan for Yahoo.
'They're really a free agent.'
A recently departed Yahoo exec emailed us the other day to say: 'the key leaders on my large team that have left in the last month is really pretty frightening!'
Another source, closer to current Yahoo execs, says that if Yang gets his way and gets control over the company through the PIPE deal, the exodus will only accelerate.
Selling new stock to a PE firm will dilute the rank and file 'dramatically,' especially considering there will be 'no hope for an exit.'
'People are going to flee.'