Free content streaming will be ad-supported

Yahoo has downloaded a distribution deal with CBS Interactive that gives the Netco access to the Eye’s skeins as it continues to fight Carl Icahn’s demands that topper Jerry Yang be ousted.

Yahoo TV will host and stream CBS entertainment content for free through the Netco’s video player. Viewing will be ad-supported.

Yahoo already offers NBC and Fox programming through a deal with Hulu. Pact adds another portal to the CBS Audience Network, which has already partnered with AOL, Microsoft and CNET.

Icahn, meanwhile, continues to agitate for the removal of Yahoo’s topper. The financier on Wednesday sent another letter to Yahoo chairman of the board Roy Bostock, taking the Netco to task for its alleged attempts to sabotage Microsoft’s takeover bid through a severance plan that escalated potential costs.

Details of the severance plan surfaced in a shareholder complaint filed in a Delaware court and unsealed this week. The plan, adopted 12 days after Microsoft made its initial bid on Jan. 31, guaranteed cash and stock payments to any employee who is fired or reassigned to a new job within two years of a Microsoft takeover.

The plan could trigger $464 million-$2.4 billion in employee payments if Microsoft pulled off a successful takeover at a price of $31-$35 per share.

Icahn is banking on an eventual deal between Microsoft and Yahoo. He has spent more than a $1 billion to acquire a 4.3% stake in the Web portal, and he has put together a proxy slate to replace Yahoo’s board of the directors. The Netco’s annual shareholder meeting, which was delayed due to Microsoft’s takeover bid, is skedded for Aug. 1.

(The Associated Press contributed to this report.)

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