Innisfree M&A Incorporated confirmed that it has been hired by Microsoft.
In a so-called 'proxy fight' Microsoft would hope to encourage investors to remove the existing Yahoo board, all of whom are up for nomination this year.
A report in The New York Times on Tuesday suggested that Microsoft may instigate its proxy battle as soon as this week.
The company would then have until 14 March to submit its own choice of directors for shareholders to approve.
Yahoo, meanwhile, has quickly ushered in generous redundancy benefits for employees.
Details revealed in a securities filing suggest that all staff will receive at least four months' salary, with top executives securing two years' worth, in the event of redundancies if the company is sold in the next two years.
Privilege escalation bug already being exploited in the wild
NASA's Voyager 2 probe set to reveal secrets of space beyond the heliosphere as it goes interstellar
The probe is now more than 18 billion kilometres from Earth, with equipment enabling it to reveal some of the secrets of interstellar space
Four glaciers located west of massive Totten glacier have lost almost three metres of ice in height since 2008
Ceres, located in the asteroid belt, has a carbonaceous-rich upper crust, SwRI study claims