• D: All Things Digital, Tuesday, July 8, 2008 11:45 AM

Microsoft claims it will be ready to restart Yahoo acquisition talks only if shareholders embrace Carl Icahn's proxy slate at the company's Aug. 1 shareholder meeting. Yahoo shoots back, saying, we're ready to sell now, what's the difference? Microsoft, it seems, wants the infighting at Yahoo to boil over to the point where the company's stock is worth nothing before it swoops in to pick up the pieces.

A nasty strategy, perhaps, but it's one that seems to be working. Kara Swisher reports that last week, major Yahoo investor Gordon Crawford told Jerry Yang in a face-to-face meeting that he was seriously considering voting against the Yahoo CEO in the looming proxy fight. Not a good sign, Swisher says, obviously for Yang, but also for the rest of the Yahoo board. Apparently, in addition for chastising them about botching the Microsoft deal, Crawford questioned the board's strategy going forward, indicating that he'd lost patience with their incompetent handling of the situation, and may decide to vote for Icahn's proxy slate instead. Crawford's Capital Research Global Investors fund owns 6.5% of Yahoo, according to SEC filings.

Crawford's decision comes as a double blow to Yahoo leadership after Microsoft indicated willingness to work with Carl Icahn and his proxy board slate, which could be nominated in an Aug. 1 shareholder meeting. Earlier in the year, Microsoft offered as much as $33 per share to buy Yahoo, but the Web giant's board refused to sell for it what it deemed to be a lowball offer. After Microsoft walked away from the deal, Yahoo shares fell back into the $20s.

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