Icahn also requested of Bostock that the board not engage in any actions that might "in any way impede a future Microsoft merger" before allowing shareholders "to opine on them".

This is likely a reference to so-called poison pill maneuvers or to partnerships that Microsoft has indicated it would find undesirable, like the possible outsourcing of a part of Yahoo's search ad business to Google.

"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," Icahn wrote in closing the letter.

Various big Yahoo shareholders have expressed their displeasure with Yahoo's board and management for, in their view, not negotiating in good faith with Microsoft and causing the talks to collapse. Yahoo formally rejected Microsoft's original offer on February 11, saying it undervalued the company.

On Monday, May 5, the first day of trading after Microsoft's offer withdrawal, Yahoo's stock lost significant value, closing down 15 per cent at $US24.37, after dropping as low as $US22.97 during the day.

Last week, Yahoo co-founder and CEO, Jerry Yang, and other top Yahoo executives tried to shift the blame to Microsoft, alleging that the $US33-per-share offer was never put in writing and that Microsoft unexpectedly walked away at a time when Yahoo was still open to negotiating.

Meanwhile, a much-publiciSed deal in which Yahoo would outsource part of its search advertising business to Google -- the possibility of which Microsoft CEO, Steve Ballmer, cited as a major reason to withdraw the offer -- has yet to be finalised, and, according to recent anonymously sourced press reports, has lost steam.

Icahn is well-known for taking to task the CEOs of companies he invests in when he feels they aren't doing a good job of delivering shareholder value.