UPDATE 1-Delaware court denies expedited Yahoo trial

(Updates BRIEF with details from ruling)

NEW YORK, June 16 (Reuters) - A Delaware court denied a request on Monday by shareholders suing Yahoo Inc (YHOO.O) to expedite proceedings against the company ahead of its annual shareholder meeting set for Aug. 1.

The investors had renewed their call for a swift trial on Friday, saying Yahoo's new advertising deal with arch-rival Google Inc (GOOG.O) was designed to discourage shareholders from siding with billionaire Carl Icahn in a proxy battle.

Delaware Chancery Court Judge William Chandler said in his ruling that the Google deal, announced on Thursday, did not change the core argument of the plaintiffs in a way that justified an expedited proceeding.

Two Detroit pension funds are suing Yahoo over its handling of a $47.5 billion buyout offer from Microsoft Corp (MSFT.O). Yahoo said on Thursday that talks with Microsoft over a smaller deal for its Web search business failed to produce a deal.

Yahoo shares fell to $23.40 in extended trading from its close of $23.54. (Reporting by Michele Gershberg)