Microsoft teams up with Icahn for a Yahoo bid

After the bid by Microsoft died, there was a lot of resentment against the cussedness of Yahoo in refusing this bid. Many institutional holders of Yahoo stock were thoroughly frustrated by the refusal of the Yahoo management to agree to the Microsoft offer, since that would have meant that they would have been able to get a higher return than what the market was offering. One result of that was that the stock raider, Carl Icahn made a bid to acquire control of Yahoo through hostile action. And now Microsoft has teamed up with Icahn:

A statement by Microsoft Corp. (MSFT) that it remains interested in acquiring some or all of Yahoo Inc. (YHOO) has increased the likelihood activist shareholder Carl Icahn may gain control of the Internet company's board in a proxy fight next month. Microsoft confirmed on Monday that Chief Executive Steve Ballmer had met with Icahn recently to discuss the prospects of resuming its bid for Yahoo in order to bolster its Internet presence.
The blog said Gordon Crawford of Capital Research Global Investors, Yahoo's second largest shareholder with a 6.5% stake, told Yang and other board members that he was seriously considering voting against Yahoo. Some analysts said discussions between Icahn and Microsoft may allow the activist to push through his nominees. "This is enough to sway Yahoo shareholders," said Clayton Moran, an analyst at Stanford Group.

This whole Microsoft effort to gain control of Yahoo is now going on for many months, and does not look likely to go away anytime soon. They have support of quite a few shareholders, but at what point will a majority of shareholders decide that Yahoo just does not have it anymore to remain independent and switch over to a Icahn-Microsoft bid ?