Microsoft bit off Yahoo’s arm. It was messy, but Yahoo was able to kick Microsoft in the nose and swim away. However, now there is blood in the water — a lot of it. And here comes a more aggressive shark: Carl Icahn.

Icahn, a billionaire financier, sent an open letter to Yahoo Chairman Roy Bostock today. In it, he very matter-of-factly states exactly how the Yahoo shareholders, led by him, intend to take over the company by way of a proxy battle to replace Yahoo’s board of directors. This letter was everything that Microsoft’s letters to Yahoo during the “formal letter wars” weren’t: short, sweet and very clear.

Icahn says he and his fellow shareholders feel that Yahoo was simply wrong to reject Microsoft’s initial offer of $31-a-share at a time when the company was trading in the $19-a-share range. A Microsoft/Yahoo partnership is the only logical combination to challenge industry leader Google, he says.

This letter is almost like a tutorial for Microsoft on how it should have gone about taking over Yahoo rather than continually threatening to do so. Icahn’s three main steps for how to take over Yahoo:

1. During the last 10 days, I have purchased approximately 59 million shares and share-equivalents of Yahoo

2. I have formed a 10-person slate which will stand for election against the current board

3. I have sought antitrust clearance from the Federal Trade Commission to acquire up to approximately $2.5 billion worth of Yahoo stock

Icahn also includes the biographies of all the members of the board he is putting forward. There are some good names on the list including: Dallas Mavericks owner Mark Cuban (who sold to Yahoo in 1999), venture capitalist Adam Dell, two Hollywood heavyweights (former Universal chairman and CEO Frank Biondi and New Lines Cinemas co-chairman and CEO Robert Shaye) and, of course, none other that Carl Icahn himself.

Icahn closes by imploring Yahoo to listen to its shareholders and re-enter negotiations with Microsoft. He lets it be known that he’ll call off the dogs if that happens. Otherwise, this proxy fight, unlike Microsoft’s threat of a proxy fight, is going to happen.

Note: The title of this piece (see: here) was just too good to pass up on — after we wrote the piece, we found a couple others who thought so as well.

[Photo by Sarah A. Friedman/Fortune]


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