I'm not a shareholder of Yahoo! (NASDAQ: YHOO) but I know many people who are. And, for the most part, they don't like the company's CEO and co-founder, Jerry Yang.

Isn't the CEO supposed to look out for shareholders? Yes, I'm pretty sure this is the goal of the public markets. Then again, when a visionary founder must ultimately manage a global operation, things can get messy.

Well, there's an excellent piece in the NY Times on the topic by Joe Nocera.

Yang had many chances to do a deal with Microsoft (NASDAQ: MSFT), yet, Yahoo is now left with a quirky marketing arrangement with rival Google (NASDAQ: GOOG). Ironically, such a deal is further evidence that Yahoo! is languishing in the marketplace. Although the deal may not even last long, especially in light of the antitrust implications.

No doubt, I can understand that Yang has an emotional pull with his company and its employees, but unfortunately, this can actually cloud judgment. Too often founders hire friends and keep them on board too long. Yahoo! has become a bloated organization (even though Yang said he doesn't want to become a part of Microsoft because he thinks it will lead to bureaucracy).

Something else to consider: Look at Yang's severance plan, which offers substantial benefits for departing Yahoo! employees (in the event of a change-of-control). It's a ticking time bomb, which goes beyond a typical "poison pill."

Simply put, Yang has failed his most important constituency: the shareholders. As a result, he doesn't have much credibility on a go-forward basis. When this happens, the typical outcome is that the CEO must leave.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.

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As Paul Foster wrote yesterday, The Wall Street Journal [subscription] is reporting that corporate raider Carl Icahn will seek to replace Yahoo! Inc. (NASDAQ: YHOO) co-founder and CEO Jerry Yang at the company's next shareholders meeting in early August. Although Icahn is generally outspoken and sometimes makes brash statements, he's right on this one. Here's why.

Yang created a 100-day plan in 2007 when he replaced outgoing CEO Terry Semel. It involved finding out why Yahoo! was not as successful as it should be, re-aligning priorities for profit goals and heralding that there were no "sacred cows" when it comes to Yahoo! finding its mojo again. The company -- a year later -- is floundering and has not made any progress in finding profitability growth in the face of Google, Inc. (NASDAQ: GOOG). It's unfortunate that Yahoo! is constantly compared to Google, which reigns supreme in internet search, but that is the sandbox Yahoo! is playing in.

So, if Icahn's bid to control Yahoo!'s board is successful, his first order of business would be to oust Yang, the person responsible for Yahoo!'s unsuccess in the last year and the person who torpedoed Microsoft Corp.'s (NASDAQ: MSFT) bid take over the company earlier this year. Microsoft gave up in May as Yahoo! wanted a $37 per share buyout, which would have valued Yahoo! at over $47 billion.

Recently I posted a Serious Money metrics story that included Microsoft Corp. (NASDAQ: MSFT) and Yahoo Inc. (NASDAQ: YHOO) comparisons along with six other stocks. Until now I have not felt very strongly about the merits of Microsoft's offer to acquire Yahoo! and merge assets and features.

I was leaning toward the price is too high camp, but now, after Microsoft has withdrawn the offer and I have looked at the current state of affairs of both companies, I think it did the right thing and may have avoided a nightmare.

To bring Yahoo! into the fold, Microsoft would have had to find enough cost savings by eliminating overlapping departments or it would have had to hope it could double Yahoo's earnings. If not, the acquisition would unduly weigh down the mother ship, because Microsoft's P/E Ratio of 17.08 is half that of Yahoo!'s 34.25.

MAJOR PAPERS:

• The Wall Street Journal reported that an alliance of cable, Internet and chip titans will announce plans to invest $3.2B in a company that will deliver Web access for laptops and cellphones using WiMax. The venture, valued at over $12B, includes Sprint Nextel Corporation (NYSE: S) and Clearwire Corporation (NASDAQ: CLWR) and will be backed by Comcast Corporation (NASDAQ: CMCSA), Time Warner Cable Inc (NYSE: TWC), Intel Corporation (NASDAQ: INTC) and Google Inc (NASDAQ: GOOG).
• According to people familiar with the matter, Robert Verrone, one of the most zealous commercial real-estate lenders during the industry's boom, will leave Wachovia Corporation (NYSE: WB) within the next week, the Wall Street Journal reported.

• Bloomberg reported that the Department of Justice is probing whether UBS AG (NYSE: UBS) helped clients evade American taxes. In an e-mailed statement, the firm said one senior bank employee was "briefly detained" by authorities.
• Bloomberg also reported that Vallejo, California's city council voted to go into bankruptcy. Officials said that after talks with labor unions failed to win salary concessions from police and fire fighters, the city does not have enough money to pay its bills.
• According to a rumor, TechCrunch reported that the Yahoo Inc (NASDAQ: YHOO) board of directors yesterday authorized Yahoo chairman Roy Bostock, rather than CEO Jerry Yang, to call Microsoft Corporation (NASDAQ: MSFT) CEO Steve Ballmer about re-starting negotiations.

I was convinced that Microsoft (NASDAQ: MSFT) would go hostile on Yahoo! (NASDAQ: YHOO). Microsoft is known as a tough player, right? And Yahoo seems to be a good strategic fit.

But of course, Microsoft's CEO, Steve Ballmer, has thrown in the towel on the $31 buyout offer. Apparently, he lobbed $33 per share – but the folks at Yahoo wanted $4 extra.

I can certainly understand why Ballmer doesn't want to overpay. After all, many M&A studies show that this is often deadly for dealmaking.

At the same time, Microsoft had the option of a proxy fight and a direct offer to Yahoo shareholders. However, Ballmer thought such things would be too distracting. But doesn't Microsoft have legions of attorneys and investment bankers?

Next Wednesday, April 30, in the early pre-market hours, we'll get to see earnings out of Time Warner Inc. (NYSE: TWX). Estimates for the media conglomerate from First Call are 23 cents EPS on $11.39 billion in revenues, although these numbers may be higher or lower after four more trading sessions have passed. Next quarter estimates are 25 cents EPS on $11.37 billion in revenues. Estimates for fiscal December 2008 are $1.09 EPS on $47.74 billion in revenues. Over the last 90 days, the estimates have come in slightly.

While shares have gotten back over $15, Time Warner's 52-week trading range is $13.65 to $21.97. What is interesting is that there have not been all that many major analyst calls out there. Analysts also still have an average price target north of $21.

It's too soon to provide any options or chart analysis, but the volume has been extremely light in stock options. That might indicate that traders are not expecting any major announcement for a turnaround.

One thing we may learn about are the old rumors that AOL is looking to get between Microsoft Corporation (NASDAQ: MSFT) and Yahoo! (NASDAQ: YHOO) over that proposed merger. Whether or not this occurs or whether or not this is even addressed ... well, that is up to Mr. Bewkes.

Note: Time Warner is the parent company of BloggingStocks. Jon Ogg is a producer and editor of the Special Situation newsletter for 247WallSt.com.

With Yahoo! Inc. (NASDAQ: YHOO) reporting earnings after the close tonight, the pressure is definitely on for the company to produce a strong report. As Pia Sarkar wrote at The Street.com: "Sunnyvale, Calif.-based Yahoo! has already reiterated its revenue guidance of $1.28 billion to $1.38 billion for the quarter and $5.35 billion to $5.95 billion for the year, leaving many analysts believing that the company will -- at the very least -- meet those estimates."

With the way the company has been fighting the Microsoft Corp. (NASDAQ: MSFT) bid, it seems clear that the company is going to produce a strong report. Then management will have a leg to stand on when they say there is more value to the company than what Microsoft is offering.

My gut tells me that they will beat estimates by a penny or two and confirm guidance for the rest of the year. Since they had previously brought down guidance and their overall outlook, this isn't so great. It's no secret that the company has not performed to potential and that's why many are calling on Yahoo! chief Jerry Yang to accept the Microsoft deal.

Update: Yahoo's net income showed a rise to $542.2 million, some 37 cents a share, and a profit of $150 million and 11 cents a share. Wall Street was expecting about 9 cents, thus beating the estimates, as noted above, by a couple pennies nicely, giving Yahoo! management a bargaining chip.