In a move that may surprise those who aren't used to watching corporate raider Carl Icahn go down quietly, the billionaire investor is supposedly backing down from his cry for a Time Warner (NYSE:TWX) breakup. Instead, he has settled with the board; where he originally threatened to nominate an entire new slate of board members, now he'll put up only five candidates.

Just last week, Lazard (NYSE:LAZ) came out with an Icahn-funded report suggesting that Time Warner should be split into four separate entities. Lazard's proposal would have spun off the media giant's publishing, cable, and AOL businesses. The namesake company would keep everything that was left.

Suggesting a split wasn't heresy. It seems to be working for Viacom (NYSE:VIA), and it may be just the ticket for Cendant (NYSE:CD) later this year. The problem here is that Time Warner was starting to come together just fine without the split, especially given the operating profit revival at America Online because of a strong online advertising market.

Icahn's retreat doesn't give Time Warner CEO Dick Parsons a free pass. As long as Icahn isn't unloading his 3.5% stake in the company, he can always return to fight another day. A significant show of shareholders siding with Icahn's nominees may also force Time Warner to take a harder look at why it can't seem to get its stock out of the high teens.

For now, at least, there is peace. A few more healthy quarters out of the company, and that peace may be permanent.

Time Warner has been a longtime Motley Fool Stock Advisor recommendation, while Cendant is a Motley Fool Inside Value pick.

Longtime Fool contributor Rick Munarriz has been an AOL subscriber since 1992, but he doesn't own any of the stocks mentioned in this story. The Fool has a disclosure policy. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.