Gene Munster, analyst at Piper Jaffray, said that absent a deal with Microsoft (NASDAQ-NMS:MSFT) , investors should not expect much change at Yahoo (NASDAQ-NMS:YHOO) until the company's annual meeting on August 1, when shareholders will get a chance to vote for alternate board members nominated by activist shareholder Carl Icahn. Munster expects investors will elect some new board members, who will in turn push for changes at the top of Yahoo's (NASDAQ-NMS:YHOO) executive ranks.

"Wall Street is really upset right now, but the solution will take some time," he said.

Yahoo (NASDAQ-NMS:YHOO) has been under intense pressure from several shareholders to strike a deal with Microsoft (NASDAQ-NMS:MSFT) . Analysts say many investors still think a deal is in the best interest of both companies.

Earlier this month, Redmond, Wash.-based Microsoft (NASDAQ-NMS:MSFT) and Yahoo (NASDAQ-NMS:YHOO) confirmed that discussions about an alliance on search advertising had ended.

Yahoo (NASDAQ-NMS:YHOO) has since announced plans to collaborate with Mountain View, Calif.- based Google Inc. (NASDAQ-NMS:GOOG) (GOOG), the world's largest Internet search company.

Yahoo (NASDAQ-NMS:YHOO) shares surrendered some of their gains Tuesday, but still finished up 2.75% at $22.04. Microsoft (NASDAQ-NMS:MSFT) shares slipped 24 cents to $27.73.

Yahoo's (NASDAQ-NMS:YHOO) stock rise came even as analysts questioned the company's future. On Tuesday, Thomas Weisel Partners analyst Christa Quarles downgraded Yahoo (NASDAQ-NMS:YHOO) shares to underweight from market weight, in part because it was having difficulty retaining its most valuable staff.

Other analysts said Yahoo (NASDAQ-NMS:YHOO) remains an attractive target for Microsoft (NASDAQ-NMS:MSFT) . "We think Yahoo (NASDAQ-NMS:YHOO) is the best and easiest way for Microsoft (NASDAQ-NMS:MSFT) to more successfully pursue the considerable global online advertising opportunity," said Standard & Poor's analyst Scott Kessler.

Kessler believes Microsoft (NASDAQ-NMS:MSFT) has "gained leverage" because of the negativity arising around Yahoo (NASDAQ-NMS:YHOO) following the collapse of Microsoft (NASDAQ-NMS:MSFT) talks and staff departures.

Sandeep Aggarwal, analyst with Collins Stewart, said in a recent note that Yahoo (NASDAQ-NMS:YHOO) had been "badly distracted" by the Microsoft (NASDAQ-NMS:MSFT) acquisition talks and noted that economic headwinds are taking their toll on Internet display advertising expenditure, a key source of revenue for Yahoo (NASDAQ-NMS:YHOO) .

-By Jessica Hodgson, Dow Jones Newswires; 415-439-6455; jessica.hodgson@ dowjones.com; and Scott Morrison, 415-765-6118; scott.morrison@dowjones.com

    (END) Dow Jones Newswires   06-24-08 1843   Copyright (c) 2008 Dow Jones & Company, Inc.