In a letter sent to shareholders Thursday, Yahoo CEO Jerry Yang says the company is seeking to maximize its value in the face of a proxy battle with an alliance between Microsoft Inc. (NASDAQ:MSFT) and billionaire investor Carl Icahn, the Japanese Kyodo News agency reported Saturday.

"Your board takes seriously its obligation to examine all value-creating steps it could take and continues to actively examine many of these now, including a potential spinoff of our Asia assets and a return of cash to stockholders," Yang and Yahoo board chairman Roy Bostock said in the letter, an apparent reference to Yahoo's 33 percent stake in Alibaba.com.

Yahoo's shareholders will meet Aug. 1 to vote on a bid by Microsoft, the Internet's third-largest search engine operator, to replace the board of Yahoo, the No. 2 search engine. Microsoft has allied itself with Icahn in an effort to forge a strong competitor to Google Inc. (NASDAQ:GOOG)'s dominance of the Internet search engine field, Kyodo said.