Yahoo!, the embattled internet search giant, has delayed its annual meeting by as much as three weeks as it tries to buy time to fend off an assault by Carl Icahn, the billionaire investor pushing for merger talks with Microsoft.

Having initially set a date for the meeting at the beginning of July, the delay means investors in the search group will have to wait until the end of that month for the chance to make their views known.

It gives Yahoo! more time to prepare its defence against Mr Icahn, who is trying to have nine of his representatives and himself elected to the board.

Mr Icahn, a legendary activist investor, owns 10 million Yahoo! shares and options on a further 49 million.

He has ratcheted up the pressure on Yahoo! since it rejected a $47.5 billion (£24 billion) takeover bid from Microsoft, the software group that is trying to contend with the internet power of Google.

According to comScore, an American research firm, Google had 61.6 per cent of the US search market in April, Yahoo! had 20.4 per cent and Microsoft controlled 9.1 per cent.

Microsoft, which first began publicly courting Yahoo! in February with a $40 billion bid, abandoned its efforts earlier this month after its increased offer was spurned.

Jerry Yang, the co-founding chief executive of Yahoo!, has consistently rejected Microsoft's bid approaches on the grounds that they undervalue the search engine, which was set up as the internet began to develop in 1994.

Microsoft's $33-a-share abandoned offer represents a premium of about 17 per cent to Yahoo!'s recent share price, which closed yesterday at $27.53. Microsoft shares were yesterday valued at $28.47 each.

Recent reports have said Yahoo! and Microsoft have reopened tentative talks about alternatives to a full-blown merger.

A handful of hedge fund investors have thrown their weight behind Mr Icahn's rebellion. They include Paulson & Co; T Boone Pickens, chairman of BP Capital; and Daniel Loeb of Third Point.

Mr Icahn, 72, is advocating a merger of the two companies, both of which have struggled to keep pace with the pace of internet growth.

"Microsoft would be crazy to give up this opportunity that we handed them in this fight. These companies should be merged in one way or another," Mr Icahn told reporters at a press conference in New York earlier this week.

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