"We're waiting to see what Microsoft is going to do," she said. "They've been saying they're out of the picture, but we feel that Microsft still needs Yahoo to compete with Google, so we're wondering if this is a game Microsoft is playing to let Icahn and Yahoo fight it out so they won't have to pay as much for Yahoo."
The question now is whether these two formerly bitter rivals can work together for the benefit of the company and the stockholders.
Gardner said it makes good economic sense for the board and the executive team to work together on behalf of two larger groups - Yahoo's employees and its investors.
"Given the amount of money and the importance of these kinds of deals, they can bury the hatchet and move on, but the terms and conditions have to be right," he said.
And a little animosity isn't necessarily a bad thing, Enderle said.
"There are too many boards and chief executives that seem to be buddy-buddy, and the whole point of having a board is to have oversight over a public company that represents the stockholders," he said. "So a certain amount of animosity between the board and the executive team could actually be a good thing and help the company as well as help keep the executive team focused. But too much animosity means they would be nonfunctional."
Dangson said now that Icahn will have a seat on the board, he can still push his agenda even though he's not going to control the majority of the board. But it's also up to Yahoo to prove its value to it shareholders, she said.
How or whether Microsoft remains involved is a big question. But now that Icahn, who support Microsoft's effort to acquire Yahoo, is on the board, he has some authority to structure and vote on a deal with Microsoft.
"He doesn't have a controlling interest yet but that all depends on the dynamics of the board," Enderle said. "Icahn and the people he's going to bring on board can be very compelling in their arguments [about the direction of the company]."
Gardner said the deal with Icahn makes the Yahoo board and Yang appear in a better light to shareholders. "There have been multiple flavors of what the truth is behind these ongoing negotiations [with Microsoft] and this makes it seem like they did have good faith and wanted to express good faith in dealing with Microsoft," he said.
But now Yahoo looks like it is ready to go back to the drawing board and once again reopen talks with Microsoft, Gardner said. And Microsoft has to figure out what it wants to do, he said.
"Microsoft needs to decide what part of Yahoo it wants to buy and for how much," he said.
Enderle said Yahoo is in better shape now by ending the fight with Icahn through negotiations rather than through a nasty proxy fight.
"The proxy fight would have resulted in a board that was going to go in and house clean Yahoo, which means Yahoo would get worse before it gets better," he said. "Now there's a chance that this combination will allow the company to focus on getting better out of the gate."