Activist investor Carl Icahn resigned from the board of Yahoo Inc on Friday, a little more than a year after winning a seat in the wake of its protracted takeover talks with Microsoft Corp .

Icahn said in a letter to the board that he did not believe Yahoo needed an activist investor as a director at this time, and that his attention was focused on other matters. The letter said his resignation was effective immediately.

Yahoo's co-founder Jerry Yang, then chief executive, rebuffed a $47.5 billion takeover bid by Microsoft in May 2008, prompting Icahn, who had acquired a 4.3 percent stake in Yahoo, to launch a proxy contest to oust the board.

They struck a settlement in July 2008, giving Icahn and two of his hand-picked nominees seats on the Yahoo board.

Yang resigned as CEO at the end of 2008 and was replaced by Carol Bartz in January. Yahoo and Microsoft announced a 10-year search partnership in July this year, in which Yahoo will use Microsoft's back-end search technology on its Web portal.

In his letter, Icahn said he believed the Microsoft transaction would provide great long-term benefits to Yahoo and said that Bartz was doing a great job.

Shares of Yahoo were off 35 cents at $16.85 in after hours trade.

(Reporting by Alexei Oreskovic)

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