UPDATE 1-Icahn trashes Yahoo for failed growth plan

Mon Jun 9, 2008 2:31pm EDT

(Adds Yahoo proxy statement details, share price)

NEW YORK, June 9 (Reuters) - Carl Icahn on Monday fired off another letter savaging the board and management of Yahoo Inc (YHOO.O) for failing in its growth plan, the latest volley in an escalating proxy battle the billionaire investor has staged at the Internet company.

Icahn -- who is seeking to replace the board of Yahoo with his own nominees, including himself -- took aim at Yahoo CEO Jerry Yang, saying he has failed to come up with a suitable plan to beat back rivals including Google Inc (GOOG.O).

"While Google's income from operations grew 59 percent per year for the last two years, Yahoo's income from operations shrank 21 percent," Icahn said in his latest salvo to Yahoo Chairman Roy Bostock.

"What was the board doing over this period? Where was their great plan? Why did you permit Google to leave you in the dust?" Icahn asked.

Later on Monday, Yahoo filed its proxy statement for its Aug. 1 shareholder meeting with the U.S. Securities and Exchange Commission.

The Web company urged shareholders to reelect the current board of directors, including Bostock and Yang, and reject Icahn's slate.

Yahoo also said in the filing it expects to foot $12 million in proxy solicitation costs.

Shares of Yahoo were down 6 cents at $26.38 in afternoon trading on the Nasdaq. (Reporting by Dane Hamilton and Anupreeta Das, editing by Mark Porter and Gerald E. McCormick)

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