Two weeks after Microsoft Corp abandoned its pursuit of Yahoo Inc, a proxy fight launched by activist investor Carl Icahn has put Microsoft in the driver's seat.

Icahn wants Yahoo to reopen talks with Microsoft, saying the company's board had acted "irrationally" when it rejected Microsoft's $47.5 billion buyout offer. Microsoft walked away from the deal earlier this month when Yahoo rejected its final offer of $33 a share, holding out for at least $37 a share.

"With Yahoo being pushed by shareholders to get back to the table, you would think it's just what Microsoft wanted," said Marc Weingarten, an attorney with Schulte Roth & Zabel.

For its part, Microsoft has declined to comment on Icahn's actions. A company spokesman repeated the same message that its executives have said over the last two weeks: it had moved on.

Still, Icahn has opened the door for Microsoft to swoop in as white knight and buy Yahoo in a friendly deal without instigating the proxy battle it had threatened.

"Microsoft can come directly back to the Yahoo board and save them from the proxy contest, save them from all the criticism that they are getting," said Weingarten.

Sourece: Yahoo News