Below is the text of a letter sent by billionaire investor Carl Icahn to the chairman of Yahoo (biographies of his slate of board nominees have been abbreviated):

Carl C. Icahn,

Icahn Capital LP,

767 Fifth Avenue, 47th Floor,

New York, NY 10153

May 15, 2008

Roy Bostock

Chairman

Yahoo! Inc (NASDAQ: YHOO - News) .

701 First Avenue

Sunnyvale, CA 94089

Dear Mr Bostock:,

It is clear to me that the board of directors of Yahoo has acted irrationally and lost the faith of shareholders and Microsoft. It is quite obvious that Microsoft's bid of $33 per share is a superior alternative to Yahoo's prospects on a standalone basis. I am perplexed by the board's actions. It is irresponsible to hide behind management's more than overly optimistic financial forecasts. It is unconscionable that you have not allowed your shareholders to choose to accept an offer that represented a 72% premium over Yahoo's closing price of $19.18 on the day before the initial Microsoft offer. I and many of your shareholders strongly believe that a combination between Yahoo and Microsoft would form a dynamic company and more importantly would be a force strong enough to compete with Google on the Internet.

During the past week, a number of shareholders have asked me to lead a proxy fight to attempt to remove the current board and to establish a new board which would attempt to negotiate a successful merger with Microsoft, something that in my opinion the current board has completely botched. I believe that a combination between Microsoft and Yahoo is by far the most sensible path for both companies. I have therefore taken the following actions: (1) During the last 10 days, I have purchased approximately 59 million shares and share-equivalents of Yahoo; (2) I have formed a 10-person slate which will stand for election against the current board; and (3) I have sought antitrust clearance from the Federal Trade Commission to acquire up to approximately $2.5 billion worth of Yahoo stock. The biographies of the members of our slate are attached to this letter. A more formal notification is being delivered today to Yahoo under separate cover.

While it is my understanding that you do not intend to enter into any transaction that would impede a Microsoft-Yahoo merger, I am concerned that in several recent press releases you stated that you intend to pursue certain "strategic alternatives." I therefore hope and trust that if there is any question that these "strategic alternatives" might in any way impede a future Microsoft merger you will at the very least allow shareholders to opine on them before embarking on such a transaction.

I sincerely hope you heed the wishes of your shareholders and move expeditiously to negotiate a merger with Microsoft, thereby making a proxy fight unnecessary.

Sincerely yours,

Carl C. Icahn

SLATE BIOGRAPHIES

Lucian Bebchuk - The William J. Friedman and Alicia Townsend Friedman professor of law, economics and finance, and director of the program on corporate governance at Harvard law school.

Frank Biondi - senior managing director of WaterView Advisors, an investment adviser organization. The former chief executive officer of Universal Studios and Viacom, Mr Biondi is a director of Amgen, Cablevision Systems, Hasbro, Bank of New York Mellon Corp and Seagate Technology (NYSE: STX - News) .

John Chapple - President of Hawkeye Investments, a privately owned equity firm investing primarily in telecommunications and real estate ventures frequently working in conjunction with Rally Capital. Mr Chapple was chief executive of Nextel Partners before it was bought by Sprint.

Mark Cuban - Majority and controlling owner of the National Basketball Association franchise, the Dallas Mavericks. Mr Cuban co-founded HDNet, an all-high-definition television network on DirectTV that broadcasts high-definition sports, movies and other entertainment, and co-founded Broadcast.com in 1995 and served as its board chairman until it was sold to Yahoo in July 1999.

Adam Dell - Managing General Partner of Impact Venture Partners, a venture capital firm focused on information technology investments. He also serves as managing director at Steelpoint Capital Partners, a private equity firm with offices in New York and California.

Carl Icahn - Chairman of Starfire Holding, a privately held holding company, and chairman of the board and a director of various subsidiaries of Starfire. Among his many board positions he has interests in video shop Blockbuster, biotech ImClone Systems, home builder WCI Communities and automotive products supplier Federal-Mogul.

Keith Meister - Principal executive officer of Icahn Enterprises GP, the general partner of Icahn Enterprises, a diversified holding company engaged in investment management, metals, real estate and home fashion businesses. Mr Meister is also managing director of Icahn Capital LP, the entity through which Carl Icahn manages third party private investment funds.

Edward Meyer - Serves as chairman, chief executive officer and chief investment officer of Ocean Road Advisors, an investment management company. He was previously chief executive of Grey Global, a multibillion-dollar global advertising and marketing agency.

Brian Posner - A private investor who previously served as chief executive of ClearBridge Advisors, an asset management company based in New York with approximately $90bn in assets and a wholly owned subsidiary of Legg Mason.

Robert Shaye - Co-chief executive of New Line Cinema. He has been involved in such films as The Lord of the Rings trilogy, Rush Hour, Austin Powers and Seven.