Icahn hadn't returned messages seeking comment as of late Tuesday. He faces a Thursday deadline to submit an alternate slate of directors to oppose Yahoo's board at the company's July 3 annual meeting.
Yahoo representatives declined to comment about a possible showdown with Icahn.
Confronting Yahoo's board would fit Icahn's modus operandi. The New York-based financier has a history of accumulating stakes in companies that have let down their shareholders with poor performances or questionable strategies.
The list of troubled companies that Icahn has recently pressured into shake-ups includes Blockbuster Inc., Motorola Inc. and Mylan Laboratories Inc. He also pushed software maker BEA Systems Inc. into agreeing to an $8.5 billion sale to its rival Oracle Corp. this year after Oracle dropped a bid of $6.7 billion.
Yahoo's board is on the hot seat for rejecting Microsoft's initial bid of $44.6 billion, or $31 per share, and taking measures that finally drove away the software maker.
Microsoft Chief Executive Steve Ballmer eventually orally offered to raise the offer to $47.5 billion, or $33 per share. He withdrew the bid May 3 after Yahoo CEO Jerry Yang, acting on behalf of the board, held out for $37 per share - a price that Yahoo's stock hasn't reached in more than two years.
Ballmer began pursuing Yahoo in an attempt to upgrade Microsoft's unprofitable Internet operations and challenge Google Inc.'s dominance of the online search and advertising markets. Although Microsoft still hopes to topple Google, Ballmer and other Microsoft executives have publicly indicated they believe they can do it without buying Yahoo.
Yang believes Yahoo will be worth more than $50 billion if the company can attain its goal of accelerating its net revenue growth by at least 25 percent in 2009 and 2010.
But analysts are skeptical about Yahoo's ability to hit those targets, particularly with the U.S. economy weakening. And many shareholders prefer the certainty of Microsoft's offer.
The hope of a renewed bid has helped cushion the blow to Yahoo's stock price since Microsoft walked away from the negotiations. Driven by the news of Icahn's interest in the company, Yahoo shares surged $1.30, or 5.2 percent, to finish Tuesday at $26.56.
It's unclear whether the prospect of a shake-up of Yahoo's board would be enough to revive Microsoft's interest. At one point, Ballmer threatened an attempt to oust Yahoo's board if the directors didn't accept Microsoft's offer. But he backed off after concluding the battle would diminish Yahoo's value.
A Microsoft spokesman declined comment Tuesday.
