Icahn gives blessing to new Microsoft-Yahoo deal

Influential Yahoo shareholder Carl Icahn has given his backing to a proposed search and online advertising tie up between Microsoft and Yahoo, according to a Reuters report.

Icahn told the news service that he is a "strong advocate of getting a search deal done with Microsoft". However, he refused to comment on the progress of negotiations between the two parties, both of which have broken off late-stage discussions in the past after failing to reach agreement.

Icahn, whose firm owns around five per cent of Yahoo, tried to broker a deal between Microsoft and Yahoo last year after Microsoft's proposed $47bn takeover of Yahoo fell through.

The new deal is likely to see Microsoft paying billions of dollars to take over Yahoo's search advertising business, while Yahoo will sell display advertising for both firms.

Tech website All Things Digital reported last week that a deal was imminent, and that senior members of Microsoft's online team had flown to Silicon Valley to "iron out the remaining issues".