Yahoo Fights Back
In February 2008 Microsoft was making a buyout play for Yahoo. The only problem was Yahoo's board and then-CEO Jerry Yang weren't interested. That May, Icahn purchased 50 million shares of Yahoo and began threatening a proxy fight to oust Yahoo's board in response to what he called its "irrational" refusal to sell to Microsoft.
Icahn agreed to abandon a proxy fight that aimed to force the company's sale to Microsoft in exchange for a seat on Yahoo's board of directors. He also called for Yahoo to expand its board to include a seat for himself and two nominees he recommended.
In October 2009 Icahn resigned from the board, never accomplishing his ultimate goal of selling Yahoo to Microsoft. In an outgoing note to the Yahoo board of directors, he counted a strategic 10-year partnership with Microsoft and the replacement of CEO Jerry Yang with Carol Bartz as major accomplishments. In 2010 Icahn dumped most of his Yahoo shares.