Carl Icahn's letter to Roy Bostock

Carl Icahn released his letter to the Yahoo board Thursday. Here is the full
text of the letter:

Carl C. Icahn

ICAHN CAPITAL LP

767 Fifth Avenue, 47th Floor

New York, NY 10153

May 15, 2008

Roy Bostock

Chairman

Yahoo! Inc.

701 First Avenue

Sunnyvale, CA 94089

Dear Mr. Bostock:

It is clear to me that the board of directors of Yahoo has acted irrationally
and lost the faith of shareholders and Microsoft. It is quite obvious that Microsoft's
bid of $33 per share is a superior alternative to Yahoo's prospects on a standalone
basis. I am perplexed by the board's actions. It is irresponsible to hide behind
management's more than overly optimistic financial forecasts. It is unconscionable
that you have not allowed your shareholders to choose to accept an offer that
represented a 72% premium over Yahoo's closing price of $19.18 on the day before
the initial Microsoft offer. I and many of your shareholders strongly believe
that a combination between Yahoo and Microsoft would form a dynamic company
and more importantly would be a force strong enough to compete with Google on
the Internet.

During the past week, a number of shareholders have asked me to lead a proxy
fight to attempt to remove the current board and to establish a new board which
would attempt to negotiate a successful merger with Microsoft, something that
in my opinion the current board has completely botched. I believe that a combination
between Microsoft and Yahoo is by far the most sensible path for both companies.
I have therefore taken the following actions: (1) during the last 10 days, I
have purchased approximately 59 million shares and share-equivalents of Yahoo;
(2) I have formed a 10-person slate which will stand for election against the
current board; and (3) I have sought antitrust clearance from the Federal Trade
Commission to acquire up to approximately $2.5 billion worth of Yahoo stock.
The biographies of the members of our slate are attached to this letter. A more
formal notification is being delivered today to Yahoo under separate cover.

While it is my understanding that you do not intend to enter into any transaction
that would impede a Microsoft-Yahoo merger, I am concerned that in several recent
press releases you stated that you intend to pursue certain "strategic
alternatives". I therefore hope and trust that if there is any question
that these "strategic alternatives" might in any way impede a future
Microsoft merger you will at the very least allow shareholders to opine on them
before embarking on such a transaction.

I sincerely hope you heed the wishes of your shareholders and move expeditiously
to negotiate a merger with Microsoft, thereby making a proxy fight unnecessary.

Sincerely yours,

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