May 22 (Bloomberg) -- Yahoo! Inc., the Internet company that spurned a $47.5 billion bid from Microsoft Corp., postponed its annual meeting after billionaire investor Carl Icahn started a campaign to unseat the board.

The meeting, originally set for July 3, will now occur at the end of that month, the Sunnyvale, California-based company said today in a corporate filing. Yahoo said the deal gives regulators more time to review documents tied to the board election.

The move signals Yahoo Chief Executive Officer Jerry Yang is under pressure to prove he can win investors back after rejecting an offer from Microsoft, which would have helped the combined company compete with Google Inc. Icahn said last week that he would seek control of the board if Yahoo directors failed to agree to a merger with the software maker.

``It's going to give them some time to either negotiate with Microsoft or deal with Carl Icahn,'' said Charles Elson, director of the Weinberg Center for Corporate Governance at the University of Delaware in Newark.

Yahoo's shares are trading 17 percent below Microsoft's $33- a-share offer. They rose 20 cents to $27.53 in Nasdaq Stock Market trading today. Microsoft, based in Redmond, Washington, advanced 22 cents to $28.47.

Microsoft abandoned its bid for Yahoo on May 3, three months after its initial advances. Yang had demanded at least $37 a share for the company he helped found in 1994.

Microsoft announced May 18 it was pursuing a new transaction with Yahoo that didn't involve a takeover. The company said it may reconsider a Yahoo bid at some point.

Icahn's Slate

All of Yahoo's directors are up for re-election at the meeting. Icahn's 10 nominees include himself, Dallas Mavericks owner Mark Cuban and former Viacom Inc. Chief Executive Officer Frank Biondi Jr.

Two other Yahoo shareholders said they plan to nominate themselves to the board, and a third plans to offer up a slate of nine people, Yahoo said. Those investors didn't comply with Yahoo's bylaws, the company said.

Yahoo also said today that director Edward Kozel resigned, cutting the number of board members to nine. Kozel had delayed a planned departure because of the acquisition talks with Microsoft, according to Yahoo. He didn't immediately return a phone message.

Icahn, 72, and Yahoo spokeswoman Diana Wong didn't immediately return phone messages. Microsoft representative Frank Shaw declined to comment.

Icahn's Backers

Icahn said May 15 that he owned 10 million Yahoo shares and options to buy 49 million more. He has won support from investors including New York hedge fund Paulson & Co., BP Capital LLC Chairman T. Boone Pickens and Third Point LLC's Daniel Loeb.

``Microsoft would be crazy to give up this opportunity that we handed them in this fight,'' Icahn said last night at a New York conference. ``These companies should be merged in one way or another.''

Microsoft had chased Yahoo to step up competition with Google, the most popular Internet search engine. The company handled almost two-thirds of U.S. search queries last month, according to Reston, Virginia-based researcher ComScore Inc. That's more than twice the share of Yahoo, its nearest rival.

Google co-founder Larry Page said today that a Microsoft acquisition of Yahoo would harm innovation by giving the combined company too much control over Web communications. Google is pursuing an agreement to sell advertising for some of Yahoo users' Internet searches.

``We're pretty concerned that a Yahoo-Microsoft merger would really close a lot of things that are really important,'' such as an instant-messaging system that wouldn't work with other software, Page said in a speech in Washington.

To contact the reporter on this story: Crayton Harrison in Dallas at tharrison5bloomberg.net

Last Updated: May 22, 2008 18:59 EDT