Icahn backed by Microsoft

MICROSOFT has backed investor Carl Icahn in his bid to oust the board of Yahoo.

The software firm has said a successful shareholder rebellion would encourage it to make a new bid to buy Yahoo's internet search engine, or possibly the whole company.

The backing gives Mr Icahn leverage with shareholders ahead of the company's annual meeting on August 1.

Analysts believe Mr Icahn will now have more credibility with shareholders because he had been arguing that a board purge was the only way to salvage a deal with Microsoft.