Hey Jerry: Welcome to the big-time

“Smokey, my friend, you are entering a world of pain.” — John Goodman as Walter Sobchak, in The Big Lebowski

Yahoo CEO Jerry Yang might be feeling pretty good about winning Round One with Microsoft CEO Steve Ballmer, the former basketball coach with the Young Frankenstein-style features and the pit-bull reputation. Unfortunately for Jerry, however, this appears to be a tag-team match, and Steve may have unwittingly tagged in The Terminator, otherwise known as Carl Icahn — a guy who was waging all-out proxy wars when Jerry Yang and David Filo were still shoving quarters into the Space Invaders machine down at the local video-game parlor.

According to several reports, including one in the Wall Street Journal, Carl has acquired about 50 million shares or so of the Internet giant, and may be planning to start a proxy battle so that he can shove Yahoo into the arms of Microsoft and get a nice pop for his trouble. That kind of thing is like falling off a log for Carl, a guy who helped define the term “corporate raider” and has gone after companies like RJR Nabisco, Texaco, Time Warner and Motorola. Carl has taken over companies — or been bought out by companies — in between lunch and dinner.

Ballmer apparently gave up on Yahoo in part because he was afraid of a proxy war, and/or was concerned that the company might do a deal with Google or otherwise muddy the waters and make it harder to establish a value for the company that Microsoft could live with. For Icahn, that kind of thing is like chum in the water — it means that there is something bleeding nearby, something vulnerable, something worth taking a run at. In other words, just the kind of scenario that my friend Kara Swisher describes so vividly in her post. If Jerry thought that Microsoft was his biggest problem, he may have another think coming.

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