Why Carl Icahn doesn't have a Yahoo CEO

If corporate raider Carl Icahn ever had any hope of convincing major Yahoo shareholders like Legg Mason's Bill Miller to back his alternative slate against the Yahoo board in a proxy fight, he needed a plan B in case a sale to Microsoft didn't work out. As Kara Swisher puts it, he needed "a solid management team and a cogent plan." For two reasons: One, because without an alternative to a merger with Microsoft, Microsoft would own all the chips in any merger negotiations. Two, by not naming a replacement Yahoo management team, Icahn left major shareholders with the impression that he himself would control the company after winning a proxy fight. Shareholders are unhappy with Yang & Co., but they tell Swisher that "taking such a major step as dumping them and leaving the company in Icahn’s hands — even for a short time he will be there — is decidedly more risky." So if it was so important that he do so, why didn't Icahn ever name a nominee for Yang's job? Because he was caught in a classic Catch-22.

Why would respectable Web industry executives like former Yahoo COO Dan Rosensweig, former Fox Interactive boss Ross Levinsohn, or Levinsohn's partner at Velocity Interactive, ex-AOL CEO Jon Miller — the kind of names shareholders would trust — sign up with Icahn just in time to get replaced by Microsoft's Kevin Johnson? And why would they jinx their chances at a getting named to the plum job by Yang itself — a far more comfortable coronation? That's why those names never showed up in an Icahn press release. It's also why Icahn's board slate is filled by a bunch of no-names and Mark Cuban, whose feud with Yahoo is now nearing a decade in age.

So, what did Carl Icahn really do wrong? Buy his first share of Yahoo.

(Photoillustration by Jackson West; photo of Icahn by AP/Mark Lennihan)