Yahoo have rejected a bold takeover bid from Microsoft and billionaire investor Carl Icahn. The deal would have seen Microsoft take control of Yahoo's search engine with the rest of the global internet services company going to corporate raider Icahn. It is just the latest chapter in the Yahoo-Microsoft soap opera.

The offer tabled by Icahn and Microsoft gave Yahoo's board just 24 hours to assess the deal and no scope to negotiate. It would also have seen the removal of the current Yahoo board as well as senior management. Ichan owns 5% of Yahoo and is campaigning for the removal of the current board at the internet company's AGM in August.

Yahoo responded angrily to the proposal stating that "it is ludicrous to think that our board would accept such a proposal". A spokesperson for the computer software and internet company also questioned the alliance between Microsoft and Carl Icahn: "This odd and opportunistic alliance of Microsoft and Carl Icahn has anything but the interests of Yahoo's stockholders in mind."