San Francisco Chronicle – A major investor called on Yahoo Inc. to sell its search business to Microsoft Corp. on Wednesday, adding to the pressure on the Sunnyvale Web portal to restart talks with its rival.

Meanwhile, Yahoo agreed to water down an employee severance plan that had been criticized as extravagant, raising speculation that the company was shopping itself for a sale. The changes were made to settle a lawsuit in which shareholders accused Yahoo of devising the severance plan to foil Microsoft’s takeover bid earlier this year.

Ivory Investment Management, a hedge fund that owns a 1.5 percent stake in Yahoo, sent a letter to board members that said a sale would garner $15 billion and help restore the company’s tumbling finances.

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