INTERNET

Friday, May 23, 2008

INTERNET

Yahoo Prepares for Board Fight

Yahoo postponed a looming showdown for control of its board, giving itself more time to prepare a defense -- or negotiate a sale to Microsoft -- that would cause activist investor Carl Icahn to call off a shareholder mutiny.

The battle between the Yahoo board and unhappy shareholders was supposed to come to a head at the company's July 3 annual meeting. But Yahoo has pushed the meeting back to an undetermined date in late July, according to a regulatory filing.

This is the second time Yahoo has postponed the meeting. The previous delay, announced in March, gave Yahoo more time to explore alternatives to Microsoft's unsolicited takeover bid, which was withdrawn two weeks ago.

Spurred by shareholders upset with Yahoo's handling of Microsoft's last offer of $47.5 billion, Icahn has nominated a slate of candidates to replace the current directors.

In its filing, Yahoo said it needs more time to prepare and obtain SEC approval for all the material it plans to file in the upcoming proxy battle.

Google's Page Opposes Deal

Google co-founder Larry Page said the company was opposed to a Microsoft-Yahoo deal because it would monopolize online communications, stifle innovation and curb competition. He also discounted the idea that a potential advertising deal between Google and Yahoo would present any potential antitrust problems.

Page said a successful Microsoft-Yahoo deal would have closed "a lot of things that are really important . . . like instant messaging."

AUTOMOTIVE

Vote Ends Strike at Parts Maker

Workers from the largest union local at American Axle & Manufacturing Holdings voted in favor of a new contract, ending a nearly three-month strike. The vote by United Auto Workers Local 235 means American Axle workers will return to work, though the date is unknown. Workers at two New York factories and another plant in Michigan already have approved the deal, which includes steep wage cuts and other concessions.

The strike forced General Motors to cut production at or temporarily close more than 30 factories, crippling output of pickup trucks and large sport-utility vehicles.

LEGAL

8 Charged in Stock-Loan Probe

Former employees of Morgan Stanley and Janney Montgomery Scott were among eight charged by U.S. prosecutors in a three-year probe of stock-loan desk workers who allegedly took millions in kickbacks. Four of the defendants pleaded not guilty to conspiracy to commit securities fraud and money laundering in federal court in Brooklyn. The rest were either expected to be arraigned or to surrender later.

The government has been investigating the loan desks and "finders" -- middlemen who track down stocks to lend to investors. "Stock-loan traders at several large brokerage firms funneled millions of dollars in fraudulent finder fees to their co-conspirators, often where no finders' services had been rendered, in exchange for cash bribes," said Robert Nardoza, a spokesman for the U.S. attorney's office in Brooklyn.

Morgan Stanley spokesman Mark Lake said his firm was cooperating with the investigation, adding that the allegations were in "direct violation of the firm's values and policies." Janney issued a statement saying its "involvement with this matter ended some time ago."

AIRLINES

Delays Sought on China Routes

United Airlines has sought and US Airways plans to ask for one-year delays in launching the new routes, representatives from the carriers said. The routes in question affect planned United service between San Francisco to Guangzhou, and US Airways flights between Philadelphia and Beijing.

United won final approval and US Airways received the tentative go-ahead from the Department of Transportation in September.

Cost of Late Flights: $41 Billion

Airline delays cost the U.S. economy as much as $41 billion last year, according to a report by the Joint Economic Committee of Congress. Delays cost airlines $19 billion last year, including $1.6 billion in fuel; passengers $12 billion in lost time; and other industries such as food service, lodging and retail $10 billion in "indirect" expenses.

Delays in the first quarter were the second-worst on record, behind the same period in 1996.

Military Airspace Opened Again

U.S. airlines can use military airspace off the East Coast this holiday weekend to cut delays that have added to industry fuel costs. The Defense Department also had opened its airspace during the Thanksgiving and Christmas holidays.

EARNINGS

Gap said its first-quarter profit jumped by 40 percent despite a persistent sales slump. The San Francisco retailer earned $249 million compared with $178 million during the corresponding period last year. However, sales fell 5 percent to $3.38 billion, as consumers scrimped on fashion to offset rising gasoline and food bills.

Compiled from reports by Washington Post staff writers, the Associated Press and Bloomberg News.