Activist investor Carl Icahn has been engaged in a contentious battle with eBay for the past two months. After buying up a small but significant stake in the e-commerce giant, Icahn launched a campaign to have eBay spin off Paypal into an independent company through an IPO. After eBay refused, he began attacking its board members, accusing them of incompetence and insider trading, pushing to replace Silicon Valley heavyweights Marc Andreessen and John Cook with his own handpicked lieutenants.

With a proxy vote looming, Icahn seems to be admitting at least partial defeat. The Wall Street Journal is reporting that Icahn is now asking for a very partial spin-off of just 20 percent of Paypal. He still wants the company to take advantage of the red-hot market for IPOs by putting a piece of the payment company up for sale to the public, but it's clear that Icahn feels his threats and accusations have failed to provoke the desired result and is looking, as he did with his proposed Apple buyback plan, to find a middle ground instead.