Yahoo Inc. is relinquishing three seats on its board of directors to activist investor Carl Icahn, ending a battle for control of the Internet company while still leaving the door open for a possible sale to Microsoft Corp.
The truce announced Monday gives Yahoo a reprieve from two months of bickering with Icahn, who had been spearheading a shareholder rebellion aimed at replacing the company's entire board in retaliation for its rejection of Microsoft's $47.5 billion takeover bid in early May.
But the compromise doesn't necessarily settle Yahoo's fate, which has been unclear since Microsoft made its first unsolicited offer in January.
Yahoo's expanded board may include a possible successor to Yahoo Chief Executive Jerry Yang, whom Icahn had threatened to fire if his attempted coup had been successful.
Microsoft teamed up with Icahn to make its most recent offer to buy Yahoo's online search operations just 10 days ago. After Yahoo angrily shunned the complicated proposal, Yang and Chairman Roy Bostock engaged in a caustic exchange with Icahn, who argued the company had made "another grave mistake" in its rebuff.
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