Microsoft backs Icahn over Yahoo

By HUGO DUNCAN FOR THE DAILY MAIL
Updated: 11:35 EST, 7 July 2008

Billionaire investor Carl Icahn tonight stepped up his fight for control of internet company Yahoo after talks with rival Microsoft.

Billionaire steps up Yahoo takeover campaign

Icahn, who owns 5% of Yahoo, is trying to stage a boardroom coup and has already nominated himself and others to replace the existing management team.

If he succeeds, Microsoft may renew its interest in Yahoo by bidding for the search business or even the whole company. Yahoo shares soared in New York.

Microsoft's support gives Icahn ammunition in his bid to unseat Yahoo chief executive Jerry Yang. In an open letter to Yahoo shareholders, Icahn said he has been in talks with Microsoft chied Steve Ballmer about the two companies 'can do a transaction together'.

He said: 'Steve made it abundantly clear he cannot negotiate any transaction with the current board.'

Icahn said Yahoo was 'moving towards a precipice', before adding: 'It is time for change.'