One of Yahoo Inc.'s largest shareholders is supporting the re-election of the Internet company's incumbent board, delivering a significant blow to an attempted coup being led by activist investor Carl Icahn.

With Friday's announcement, Legg Mason Capital Management Inc. became the biggest major Yahoo shareholder to publicly declare it will vote for the nine current directors _ a group that has been under fire since Microsoft withdrew a $47.5 billion takeover bid 2 1/2 months ago in a disagreement over price.

Legg Mason, a mutual fund manager, owns 4.4 percent of Yahoo's stock.

The final ballots in Yahoo's battle with Icahn will be cast at the company's annual meeting Aug. 1.

Signaling that Yahoo is pulling out all the stops in its campaign, the company on Friday began promoting its argument against Icahn on the main page of its Web site _ one of the world's most trafficked online destinations.

Icahn, a billionaire with a long history of challenging the boards of struggling companies, wants to replace Yahoo's directors with his own hand-picked slate so he can negotiate a sale of all or part of Yahoo.

But Legg Mason said it believes the current board can just as easily handle any future negotiations with Microsoft as the Icahn-backed candidates.

"We believe the current board acted with care and diligence when evaluating Microsoft's offers," Legg Mason Chairman Bill Miller said in a statement. "We believe the board is independent and focused on value creation for long-term shareholders."

Icahn didn't respond to a Friday request for comment.

Microsoft has said it doesn't believe it can negotiate a deal with Yahoo's current board.

Yahoo shares gained a penny to $22.45 in Friday's late trading. That's well below the $33 per share Microsoft had previously offered to buy the entire company.

Miller said he met several times with Yahoo Chief Executive Jerry Yang _ one of the company's board members _ before deciding which side to support.

Although Legg Mason plans to vote for all of Yahoo's current directors, Miller said he hoped the company could reach a compromise with Icahn to avoid two more weeks of mud slinging before the annual meeting.

Negotiating a truce could require Yahoo to give up a few board seats to Icahn and his allies, a potentially bitter pill given that Icahn has alienated the company by teaming up with Microsoft to make a bid for Yahoo's search engine. Yahoo rejected that idea last Saturday, a move that Icahn lambasted as "another grave mistake."

In an indication that Legg Mason believes Icahn deserves a place on Yahoo's board, Miller wrote, "We believe it is appropriate for large shareholders to have representation on corporate boards if they so desire." Continued...