A multimedia deal between Icahn and Diller is not unprecedented. Two years ago, the two billionaires were rumored to be interested in joining forces to link up pieces of IAC and Time Warner, in which Icahn is an investor. However, nothing concrete ever materialized.

Right now it seems Yahoo investors will be supportive of Icahn's proxy battle, even as Microsoft remains silent. IDC analyst Caroline Dangson pointed out that Yahoo shares rose 5 percent after his proxy fight was unveiled, indicating some support for the plan.

Indeed, Paulson and Co., an investment firm that holds 50 million shares of Yahoo, came out in favor of Icahn's proxy fight on Thursday in an e-mailed statement, but said it hopes the end result will be a deal with Microsoft, not Icahn taking over the company.

Other major shareholders that had expressed ire over Yahoo's not accepting Microsoft's offer and are likely to support Icahn's proxy fight are Capital Research, which owns 16 percent of Yahoo, and Legg Mason, which owns 7 percent.

Shareholders will get to officially weigh in on Icahn's proposed new board at an annual stockholder meeting July 3. Unless Microsoft and Yahoo iron out a deal by then, Icahn may walk out of the meeting the proud new leader of a $38 billion Internet company.

James Niccolai in San Francisco and Juan Carlos Perez in Miami contributed to this report.