• The Wall Street Journal, Monday, July 21, 2008 11:45 AM

In a shock move, Yahoo announced a settlement today that puts billionaire investor Carl Icahn on the company's board, and expands its total number of seats to 11. The two remaining seats will be chosen by the board from a list of nine candidates who were going to run as part of Icahn's slate. Former AOL Chairman and CEO Jonathan Miller is part of that list, and is widely expected to be named one of the three new board members, along with Icahn. Also, as part of the settlement, Yahoo said eight of its current board members would run for re-election, including CEO Jerry Yang, while one member, Activision Blizzard CEO Bobby Kotick, will not.

The agreement ends a months-long proxy battle for control of the beleaguered Web giant. It also likely means that CEO Yang will remain in his role -- at least for the time being. As The Wall Street Journal points out, it's unclear what effect the compromise will have on Yahoo's quest to sell all or parts of the company to Microsoft. Icahn had wanted full control of Yahoo in order to expedite such a sale, but with just three board seats, he is far from having the majority he needs to do what he wishes.

According to the Journal, settlement talks between Yahoo and Icahn had been ongoing for weeks, but pressure on Icahn to end his campaign mounted after shareholder Legg Mason, which owns 4.4% of Yahoo, said it would support the company's current board.

Read the whole story at The Wall Street Journal »