Parsing Yahoo: Vote Early and Often

Yahoo started the week by revealing the letter that covers the proxy materials now on their way to shareholders.

By urging shareholders to vote early, Yahoo seems to be hoping to register a big lead early in the process. If made public, such news would probably stifle votes for the alternative slate.

Here's the parse:

Bostock & Yang: Dear Fellow Stockholder:

Translation: Dear Comrade:

Bostock & Yang: The vote you will cast for directors at Yahoo!'s August 1, 2008 annual meeting is the most important for stockholders in our history.

Translation: In fact, if you vote your wallet, we could be history.

Bostock & Yang: We believe that the reelection of our current board is in the best interests of Yahoo!'s stockholders.

Translation: We continue to be fixated on your best interests. That's what keeps us up at night lately.

Bostock & Yang: Under the leadership of the current board and management team we are executing on our strategy to create value that is gaining traction.

Translation: We've abandoned our old strategy to destroy value. It was getting too much traction.

Bostock & Yang: In addition, in responding to Microsoft Corporation's proposal to acquire the company and exploring strategic alternatives, Yahoo!'s board has been focused on one central goal: how best to maximize stockholder value.

Translation: That's how we saved you from the $40 per share offer last year.

Bostock & Yang: In this regard, you should know that we have at all times been open to a transaction with Microsoft if it offers our stockholders full and certain value.

Translation: "Full and certain value" always seems to be about $6 per share more than Microsoft offers.

Bostock & Yang: We write to ask you to support our slate of highly qualified and capable directors standing for reelection.

Translation: Carl's slate is hardly qualified and incapable of governing an internet company.

Bostock & Yang: You are probably aware that Carl Icahn proposes to replace our entire board of directors with his hand-picked slate.

Translation: He's been very shy about it.

Bostock & Yang: Mr. Icahn has no credible plan except to sell the company to Microsoft -- despite the fact that Microsoft has publicly indicated that it has no current interest in such a transaction.

Translation: ... which is one more credible plan than we currently have.

Bostock & Yang: Given Microsoft's stated position of not wanting to acquire Yahoo!, the election of Mr. Icahn's slate could result in substantial erosion of stockholder value.

Translation: We don't like to mention that Microsoft also consistently states that it is not ruling out anything.

Bostock & Yang: We Urge You To Act Now To Protect Your Investment By Rejecting Mr. Icahn's Slate....

Translation: You need to project your investment against a massive premium.

Bostock & Yang: And By Voting For Our Board...

Translation: We'll settle for an abstention.

Bostock & Yang: ...Today, By Telephone, Internet, Or By Signing, Dating, And Returning The Enclosed WHITE Proxy Card.

Translation: Operators are standing by. And if you vote before midnight tonight, you'll receive a free purple exclamation point mouse-pad.

Bostock & Yang: Last year, after making changes in management, our board oversaw an intensive review by the new management team, led by Jerry Yang, of Yahoo!'s business and strategy. The result was a more focused strategy, a more streamlined company and a significant acceleration of specific initiatives to capitalize on the fast-growing online advertising market.

Translation: It could be worse. Stemel could still be here.

Bostock & Yang: As part of that strategy, we made a deliberate, disciplined decision to make investments that would generate greater long-term value for stockholders.

Translation: Even greater than a dozen quarters of earnings declines.

Bostock & Yang: We started from a great place.

Translation: ...six years ago.

Bostock & Yang: Yahoo! is clearly a one-of-a-kind asset. We're a leader in search, a pioneer in mobile advertising, and the clear leader in display advertising -- where we see the greatest growth opportunity in online advertising.

Translation: We may be ugly, but we're still the prettiest girl available at the search dance.

Bostock & Yang: With more than 500 million monthly users worldwide, many best-in-class technology platforms, and strategically unique Asian assets, we are well-positioned to capture growth in an online advertising market that is projected to grow from approximately $40 billion in 2007 to approximately $75 billion in 2010.

Translation: The rising tide will lift our leaky boat.

Bostock & Yang: The key is the knowledge and experience to execute with this unique asset.

Translation: If our key people leave, the new owner actually acquires very little of lasting value.

Bostock & Yang: We believe that successfully executing on our strategy of being the "starting point" for the most consumers on the Internet and the "must buy" for advertisers will enable us to generate double-digit growth in operating cash flow and will lead to improved stockholder returns.

Translation: We've also purchased several very promising lottery tickets.

Bostock & Yang: Our recent financial results, coupled with a number of strategic acquisitions and a string of significant product rollouts demonstrate that we are executing on our strategy:

Translation: We sat on lots of things for five years. Now we're pushing it all out of the door as fast as we can.

Bostock & Yang: We're continuing to see benefits from last year's rollout of Panama, our new search monetization platform that is helping to close the monetization gap.

Translation: It's not a bad business. It's a "monetization gap."

Bostock & Yang: Our acquisitions of Right Media, BlueLithium, Zimbra, and Maven Networks have all helped advance our core strategies.

Translation: We buy stuff, too, ya'know.

Bostock & Yang: We are winning new business partners and expanding relationships with existing partners -- WPP, Wal-Mart, CBS, and more than 770 newspapers now in our newspaper publisher consortium.

Translation: The best way to put out a raging fire is with dozens of squirt guns.

Bostock & Yang: Soon, we will roll out our new advertising management platform -- AMP! from Yahoo! -- that will enable us to offer advertisers and publishers an extraordinarily simple, seamless way to market over the Internet, helping us further our goal of becoming the "must buy" for online advertising.

Translation: With twice the exclamation points of our previous platform!

Bostock & Yang: Our Board Is Committed To Maximizing Stockholder Value.

Translation: It's true. We say it all the time.

Bostock & Yang: Our board carefully evaluated Microsoft's original offer and determined that it substantially undervalued our company and was not in the best interests of our stockholders. Over the ensuing months, we engaged in serious discussions with Microsoft, including numerous face-to-face meetings, some of which included one or more of our independent directors. During this period, our board was fully engaged, meeting more than twenty times to review the status of the discussions with Microsoft and to consider other available alternatives to maximize stockholder value. At all times, our board and management have made clear that they have been open to entering into any transaction, including a sale to Microsoft if it valued the company fairly and offered our stockholders certainty that they would receive that value, an important consideration given the likely lengthy regulatory review process before a deal would be approved.

Translation: We're sticking to our story. Pay no attention to that Detroit pension suit.

Bostock & Yang: Our board also explored and continues to explore a variety of other ways to maximize stockholder value.

Translation: We've banged on everybody's doors looking for an alternative deal.

Bostock & Yang: Carl Icahn Has No Credible Plan To Create Value.

Translation: At this point, we're very concerned about his credibility.

Bostock & Yang: Mr. Icahn's only plan for Yahoo!, if his slate is elected, is to hope that Microsoft -- which withdrew its acquisition proposal more than a month ago and has since publicly reaffirmed that it is not now interested in a full acquisition -- can be persuaded to come back to the table and agree to acquire our company. But this is not a strategy.

Translation: Where would he get the crazy idea that he could get Microsoft to pony up $33 a share?

Bostock & Yang: In our opinion, Mr. Icahn and his slate are not the right individuals to guide Yahoo! as a standalone company.

Translation: And there is no third slate.

Bostock & Yang: Our current board has the independence, the experience, the knowledge, and the commitment to navigate the company through the rapidly-changing Internet environment, execute on our initiatives to capitalize on the fast-growing online advertising market and to deliver value for Yahoo! and its stockholders.

Translation: We skipped 2.0 so we would have more time to work on 3.0.

Bostock & Yang: The future of Yahoo! and the value of your investment are in your hands.

Translation: Yes, we're begging.

Bostock & Yang: We ask you to vote for your highly qualified and dedicated directors today.

Translation: Please vote soon. If the initial voting is favorable to us, we'll release the results to try to start a stampede.

Bostock & Yang: If you have questions about voting your WHITE proxy card, please call MacKenzie Partners, Inc. Toll-Free at (800) 322-2885.

Translation: And yes, Carl, we've trained our operators to recognize your voice.

Bostock & Yang: Thank you for your support. Roy Bostock, Chairman of the Board, and Jerry Yang, Chief Executive Officer

Translation: Please, please, please, please, please. Roy and Jerry.