Billionaire investor Carl Icahn has launched a battle to overthrow Yahoo's current board of directors, following the collapse of Microsoft's proposed takeover bid.

Icahn has put forward 10 nominees to represent new management at the search giant. Among them are Frank Biondi Jr, formerly the president of Viacom, and Adam Dell, brother to Michael Dell.

The investor himself now owns 59 million Yahoo shares and has sought permission to buy more, up to a total value of $2.5bn (£1.3bn). Today Icahn savaged the recent handling of Yahoo, in an open letter to chairman Roy Bostock.

"It is unconscionable that you have not allowed your shareholders to choose to accept an offer that represented a 72 per cent premium over Yahoo's closing price of $19.18 on the day before the initial Microsoft offer," Icahn wrote.

"I and many of your shareholders strongly believe that a combination between Yahoo and Microsoft would form a dynamic company and more importantly would be a force strong enough to compete with Google on the internet."

Yahoo's share price has now risen above the level recorded during Microsoft's attempted acquisition, according to the Financial Times.

Today the Yahoo launched a developer tool to allow site owners to customise the appearance of their listings within a set of search results. Users will soon be able to opt-in to view the new, altered results.

"Being based on open source technology, SearchMonkey benefits both website owners and users by serving enhanced listings which enable everyone to receive better and more relevant search results first time,” said Jeffrey Revoy, vice president of search and social media for Yahoo Europe.