According to Bloomberg, Microsoft (MSFT) said it may renew takeover talks with Yahoo (YHOO) if investors back Carl Icahn’s plan to oust CEO Jerry Yang as well as the rest of Yahoo’s board.

Icahn, who controls about 69 million Yahoo shares, has been in talks for the past week with Microsoft. The billionaire investor says both companies need to combine to compete with Google (GOOG), and Microsoft has indicated it may buy Yahoo’s search business or the whole company. Icahn has already received the backing from other major holders such as oil man T. Boone Pickens and hedge-fund manager John Paulson.

Yahoo shares rose the most since February 1, when Microsoft originally disclosed its intentions to take over the company. Yahoo shareholders will vote on a decision next month.

From the Bull Pen: Professor Sean Udall followed up on the Buzz today regarding his Yahoo stake. He felt compelled to take a portion of the position off after today’s nearly 12% pop with August 25 calls written on the remaining portion.

From the Bear Cave: Google might seem like the better downside play. Should the stock fill in its gap, the $450 level would be next in play.