This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

How Peanut Butter Lured Icahn to Yahoo!

They say that a butterfly flapping its wings in Asia can start a hurricane in West Africa.

Hurricane Carl arrived on the doorsteps of Yahoo!'s (YHOO) offices Thursday, complete with his slate of 10 nominees to unseat Yahoo!'s entire board at the July 3 annual meeting. (And Icahn's entrance is no longer the latest twist in the Microhoo saga, as Microsoft approached Yahoo! with a new proposal on Sunday.)

The butterfly who started the chain of events that led to this is Brad Garlinghouse, a senior Yahoo! executive who penned the "Peanut Butter Manifesto" in November 2006.

Someone, not Brad himself, leaked the memo to Kevin Delaney of the Wall Street Journal and it put all of Yahoo!'s dirty laundry on the front page.

Garlinghouse wrote this memo (in the same vein as Jerry Maguire) which he sent internally to rally the troops. He criticized the company for spreading itself too thin and urged it to focus more: "We want to do everything and be everything - to everyone."

A few weeks prior to this memo's debut, I wrote a blog post criticizing Terry Semel for not be responsible for Yahoo!'s post-bubble turnaround, but as someone who was more along for the ride. Anemic traffic to my blog suddenly shot up. I also saw a wave of comments on the post from current or former Yahoo! employees agreeing with me.

The Peanut Butter memo seemed to be a cry for help. I expected that some activist hedge fund, like Icahn, Jana Partners, or Relational Investors, would be interested in Yahoo! because of its traffic, brand, and great properties overseas combined with an ineffective board and management.

They never came.

Next Yahoo! announced a December 2006 reorganization to show it was as nimble as ever. It was cosmetic. Meanwhile people kept pouring in their comments to my blog postings on what was wrong with Yahoo!, often referring to the Peanut Butter Manifesto as a final straw and suggesting action needed to be taken. I was inspired to start my own activism against the Internet giant.

1 of 4

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 18,053.71 +23.50 0.13%
S&P 500 2,088.77 +6.89 0.33%
NASDAQ 4,806.8590 +33.3870 0.70%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs