Yahoo's board is lobbying for allies as it heads for a showdown with the billionaire corporate raider at an annual gathering of the California firm's stockholders on August 1.
Icahn accuses Yahoo's board of bungling takeover talks with Microsoft and is trying to replace the board with members whose mandate would be to get the struggling Internet pioneer into a tie-up with the US software giant.
"You can choose to vote for a slate of nominees with no articulated plan for the future of Yahoo," board chairman Roy Bostock and chief executive Jerry Yang said in the letter, sent yesterday.
"Or you can choose to vote for your existing board of directors which has the independence, experience, knowledge and commitment to navigate the company through the rapidly-changing Internet environment, execute on our strategic objectives and deliver value for Yahoo and its stockholders."
Yang and Bostock revealed that, after failed takeover talks, Microsoft suggested a "search-only hybrid proposal" in which it would buy Yahoo's online search business for a billion dollars plus a percentage of future ad revenues.
The offer included Microsoft making an $8 billion investment in Yahoo, but would have barred Yahoo from making search deals with anyone else.
The deal also would have given Microsoft veto authority over any proposed sale of Yahoo.
