Investor Carl Icahn moves to oust Yahoo directors

In a letter sent Thursday to Yahoo Chairman Roy Bostock, Icahn wrote that outraged Yahoo shareholders had urged him to lead a campaign to replace Yahoo's 10 directors at the company's July 3 annual meeting in hopes of bringing Microsoft back to the bargaining table.

"I believe that a combination between Microsoft and Yahoo is by far the most sensible path for both companies," Icahn wrote.

To give him leverage in the looming battle, Icahn revealed that he has spent at least $1.3 billion snapping up about 59 million Yahoo shares to give him a roughly 4 percent stake in the Sunnyvale-based company. He plans to seek approval from the Federal Trade Commission to acquire up to $2.5 billion in Yahoo stock.

A Yahoo representative said the company would respond to Icahn's attack "soon."

Icahn told Yahoo's board it could quickly quell the shareholder mutiny by renewing negotiations with Microsoft.

Besides himself, Icahn's alternate board of directors includes Internet entrepreneur Mark Cuban, who got rich by selling Broadcast.com to Yahoo for $8.1 billion in stock in 1999. Cuban used part of his Yahoo windfall to buy the Dallas Mavericks, a National Basketball Association franchise that he still owns.

Icahn's other notable nominees include: venture capitalist Adam Dell, whose brother, Michael, founded Dell Inc.; and Frank Biondi Jr., the former chief executive of Viacom Inc.

The revolt threatens to jettison Jerry Yang from the company that he started with David Filo 14 years ago. Yang is one of Yahoo's directors and has been trying to engineer a turnaround since taking the job of CEO 11 months ago.

Together, Yang and Filo -both billionaires -still own 134 million Yahoo shares, or nearly 10 percent of the company.