Yahoo Inc. (NDAQ: YHOO) is facing more heat today after Carl Icahn sent another letter to the Board of Directors today expressing disappointment in their lack of a response to his concerns. The activist investor's previous letter had demanded that the troubled search company immediately sell itself to Microsoft in order to best serve shareholder interests. It will be interesting to see how Yahoo responds to this letter:

Dear Roy:

After reading Yahoo!'s press release put out on Friday in response to my letter of that morning, I cannot help but wonder if you even read my letter.

Again, Yahoo! keeps repeating misstatements in the hope it will convince its shareholders that these misstatements are valid. I cannot understand why the Yahoo! board feels so strongly about its "poison pill" severance plan and why it continues to refuse to rescind it. How can you continue to repeat that your severance plan is in the best interests of shareholders and employees? Indeed, Yahoo!'s own compensation advisor called the severance plan "nuts." Is it not true, as the shareholder complaint stated, that Microsoft's CEO earmarked $1.5 billion for employee retention (a benefit you neglected to tell your employees about)? Is it not better to incentivize employees to stay in their jobs than to quit? Instead of just continuing to repeat the mantra that we have made an inaccurate interpretation of your severance plan, why do you refuse to go into detail as to why our interpretation is incorrect? Additionally, a New York paper reported this weekend that "sources close to Microsoft said the severance plan was a 'big issue' when deciding what price they could pay for Yahoo!"

In your press release from Friday, you stated again that I do not have a credible plan for Yahoo! Did you even bother to read my letter, which went into great detail on what measures I would ask the new board to take? Ironically, while you keep inquiring about my plans, it is interesting to note that Yahoo!'s board has been busy reaping great compensation benefits. Indeed, you made approximately $10,000 per week last year -- not bad for a board member. I believe most of your shareholders would be interested in seeing your time sheets -- especially in light of the fact that, in my estimation, most of your so-called "plans" over the last few years have been failures. Remember the old adage -- those who live in glass houses should not throw stones. Perhaps most importantly, under my plan, I would ask the Board to bring in a talented and experienced CEO to replace Jerry Yang and return Jerry to his role as "Chief Yahoo!" It is extremely important to note that Google hired a great operator as a CEO who helped to transform the Company into a giant at the expense of Yahoo! According to publicly available financial information, while Google's income from operations grew 59% per year over the last two years, Yahoo!'s income from operations shrank 21%. What was the board doing over this period? Where was their great "plan"? I believe a new CEO with operating experience might well have had and might still have a very salutary impact on Yahoo! I ask again what your great "plan" has been over the last few years. Why did you permit Google to leave you in the dust?

I outlined a number of questions in Friday's letter. Why don't you do me the courtesy of answering my questions as I have answered yours?

Sincerely yours, CARL C. ICAHN

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Inspire Pharmaceuticals, Inc. (NDAQ: ISPH) shares jumped more than 50% in early trading after its new drug to treat cystic fibrosis met its primary goal for a Phase III trial. The 352-patient, double-blind, 24-week placebo-controlled study demonstrated statistical significance for its primary efficacy endpoint. Secondary endpoints were also evaluated in the trial, which is great news for the company.

“The data from this Phase 3 trial with denufosol are encouraging for the cystic fibrosis community because it brings us one step closer to a novel treatment that addresses the basic cystic fibrosis defect," said Robert Beall of the Cystic Fibrosis Foundation. "There remains a high unmet medical need in the area of CF treatments and denufosol could be an important addition to the treatment regimen."

The drug, denufosol, was well-tolerated and had a favorable safety profile in the trial. Patient retention rates were high and similar etween treatments groups with approximately 90% of patients completing the 24-week placebo-controlled portion. The incidence of adverse events in the group was comparable to the placebo. As in previous trials, the problems were minor - coughing.

“The results from this trial are exciting because they demonstrate that denufosol’s novel mechanism of action, activation of an alternative chloride channel that is treating the underlying defect, had a clinically-meaningful impact on lung function that progressively increased over time," said Frank Accurso. "The improvement in FEV1 was achieved on top of aggressive use of multiple concomitant medications."

In the end, this announcement definitely makes Inspire Pharmaceuticals a stock worth watching as successful drug candidates often become takeover targets once all the risk is gone. The completion of this Phase III trial means one giant leap forward in this process.

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The nation's largest cellular telephone provider was born today after Verizon Communications (NYSE: VZ) agreed to purchase Alltel for approximately $28.1 billion. The deal will help Verizon's wireless business surpass that of AT&T Wireless to take a strong lead.

The deal also represents one of the quickest flips in history as Alltel's private equity owners just completed buying the company last fall for about $27.5 billion. The result was a fast $600 million profit in just about a year. The consortium had reportedly been sitting on huge debt-related losses and were pushing hard to sell.

Under the terms of the deal, Verizon will acquire the equity of Alltel for $5.9 billion and assume $22.2 billion in debt. The transaction is slated to be completed by the end of the year. The move caught investors by surprise given the fact that it was rejected in the past due to Vodafone's resistance - a parter with Verizon Wireless.

The move also positions Verizon increasingly as a wireless business as opposed to a wireline business and is a logical fit. Both companies share the same cellular technology, CDMA, and Alltel services areas that are not serviced by Verizon. This positive spin helped push shares of Verizon up some five percent on the day.

In the end, this move underscores that the wireless industry is no place for independent telecom providers. It is the giants that thrive in this arena and even private equity funds are starting to realize that they cannot compete. It will be interesting to see how this affects others in the sector.

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