The tit-for-tat between Carl Icahn and Yahoo! Inc. over how much the Internet search company is to blame for not agreeing to a purchase by Microsoft Corp. keeps escalating, leaving investors scrambling to sort fact from hyperbole.

The latest round came Thursday evening, after Icahn on Wednesday criticized Yahoo! for putting in place a severance plan he claimed acted like a "poison pill" by holding off Microsoft because the associated costs could have topped $2 billion. Yahoo! responded late in the day by claiming its actions were designed to protect the company and shareholders' interests.

"The retention plan is intended to help us preserve and enhance shareholder value by allowing Yahoo! to continue to attract and retain the industry's best talent, and to allow employees to stay focused on implementing Yahoo!'s business strategy," said the letter, which was signed by Yahoo! chairman Roy Bostock. "In fact, the plan was adopted in order to protect the value of Yahoo! in anticipation of a possible acquisition by Microsoft, which would have resulted in a lengthy regulatory review and a significant period of uncertainty for our employees."

For the full story, visit TheDeal.com this evening