UPDATE 1-Yahoo to hold first board meeting with Icahn-source

(Adds Icahn comments, paragraphs 8-9)

SAN FRANCISCO, Sept 19 (Reuters) - Yahoo Inc YHOO.O will hold its first regularly scheduled board meeting next week since activist shareholder Carl Icahn and two new directors he backed joined, a source close to Yahoo said on Friday.

Icahn, Frank Biondi, a former chief executive of Viacom Inc VIAb.N, and John Chapple, a former CEO of Nextel Partners, joined Yahoo's board in August in exchange for the billionaire investor dropping a campaign to oust the company's board.

Icahn blamed the board and company management for bungling negotiations with Microsoft Corp MSFT.O, which attempted to buy Yahoo earlier this year.

“Discussions have been happening with Icahn and his band almost since they came on board last month,” the source said. “This is a regularly scheduled board meeting.”

A Yahoo spokesman declined to comment.

The Wall Street Journal reported earlier that Yahoo executives would provide the board with an update on ongoing talks with Time Warner Inc TWX.N about the media conglomerate's AOL unit.

The source declined to comment about whether AOL will be discussed at the meeting, but said the two sides remain involved in ongoing talks.

Speaking to CNBC on Friday, Icahn said Yahoo still has to "do something" with Microsoft or else search leader Google Inc GOOG.O will eventually "kill" the company.

Yahoo rejected a potential deal with Microsoft, opting for a search advertising agreement with Google. The Google-Yahoo deal has raised antitrust questions from competitors, industry trade groups and regulators.

Icahn had originally sought to replace the entire Yahoo board with his nominees and oust Chief Executive Jerry Yang, but eventually struck a compromise. (Reporting by Eric Auchard and Mike Erman in New York, writing by Daisuke Wakabayashi, editing by Leslie Gevirtz)