Billionaire investor Carl Icahn fired a salvo at Yahoo on Thursday morning, threatening a proxy fight unless Yahoo gets Microsoft back to the negotiating table.

In a letter to Yahoo Chairman Roy Bostock he said Yahoo’s board had acted “irrationally” in turning away an offer that amounted to a 72 percent premium and warned Yahoo not to announce any “strategic alternatives” (such as a deal with AOL or Google) without a shareholder vote.

I am perplexed by the board’s actions. It is irresponsible to hide behind management’s more than overly optimistic financial forecasts. It is unconscionable that you have not allowed your shareholders to choose to accept an offer that represented a 72% premium over Yahoo’s closing price of $19.18 on the day before the initial Microsoft offer. I and many of your shareholders strongly believe that a combination between Yahoo and Microsoft would form a dynamic company and more importantly would be a force strong enough to compete with Google on the Internet.

Icahn also disclosed he has purchased 59 million shares and has sought antitrust clearance from the FTC to acquire up to approximately $2.5 billion worth of Yahoo stock.

Microsoft has remained quiet so far. Wall Street Journal reported earlier that Icahn had been yet unable to lock in Microsoft’s support.

Also, despite having nominated a 10-member slate, which include Icahn, former Viacom chief Frank Biondi, Icahn Enterprise’s vice chairman Keith Meister, former New Line co-CEO Robert Shaye and corporate governance expert Lucian Bebchuk, he could yet settle for a smaller slate of Yahoo directors.

After spending a week telling the world how uninterested they are in Yahoo, Microsoft has remained quiet so far.

(Reuters)

Keep an eye on:

• CBS to buy CNET Networks for $1.8 billion to boost its Web presence, and maybe laying to rest a CNET activist investor fight (Reuters)
• Ask.com to expand its vocabulary with plans to buy Lexico, owner of Dictionary.com and Thesaurus.com (Reuters)

(Picture: Reuters / Icahn at the Lazard presentation during the Time Warner battle.)

Media titans John Malone and Barry Diller knew they had their fair share of disagreements over the years, but like many couples heading to divorce, they apparently needed someone else to tell them that.

Enter Wall Street Journal reporter Jessica Vascellaro.

The media industry read with rapt interest her story in October that put in plain language how much tension had built up between the two over their partnership in IAC/InterActiveCorp. 

But as the two moguls duke it out in Delaware court this week, they keep invoking that story, day after day, as the moment that sent their relationship past the point of no return. 

Diller apparently understood the story as grounds to endorse a control structure for a spin-off of IAC businesses that would dilute the grip of Malone’s Liberty Media over the units. And that is what brought them to court today.
 
“It was kind of a verification in his mind they had gone over a significant line and the possibility of doing a transaction beneficial to both sides was becoming highly unlikely,” IAC Vice Chairman Victor Kaufman said when asked by Liberty’s lawyers.
 
IAC’s lawyers made liberal use of the story as well, asking Liberty CEO Greg Maffei whether he orchestrated the original interviews with himself and a usually press-shy Malone to send a message to Diller. They asked Maffei whether he tried to influence that story by flying the New York-based reporter out to Denver and talking up his views of Diller over several hours of travel time.
 
Maffei rebuffed that idea, saying  he didn’t come up with the idea for the flight, that there were other people on the plane and most of the time they spent playing the card game “Oh, Heck”:
 
[We asked Dow Jones about the flight. Here’s their statement: “The Wall Street Journal attempted to reimburse Liberty for the flight, but the company subsequently returned the check. In keeping with our guidelines, we still intend to reimburse Liberty. We stand by the fairness and accuracy of our story.”]
 
After it appeared, Malone said he had already guessed Diller’s reaction:
“I thought Barry’s not going to like this when he sees it. (Did you call Diller?) I should have but I did not. Because when I read it, it came across not the way I would have liked it to come across. 
    
In the end I did call. It was roughly two months later. (Apparently Diller told Malone of his one share, one vote plan during that call)”

(Photo: Reuters / Maffei in Sun Valley 2007)