Yahoo CEO Marissa Mayer. Monica Schipper/Getty Images The month-long period to nominate new directors for Yahoo's board officially kicked off on Thursday.

That means activist investors like Starboard Value can now submit proposals for new Yahoo board members, opening up the stage for a possible proxy fight against the current board — and putting Yahoo CEO Marissa Mayer's job on the line.

Starboard wants Yahoo to change its top management and sell its core business. Yahoo said it would seek the sale of its internet business, but also indicated it wants to keep the status quo and focus on its original turnaround plan led by Mayer.

Either way, things won't be pretty for Yahoo. Here's what could happen to the company in the coming weeks.

Proxy fight

The natural thing to happen would be a proxy fight led by Starboard, which has been the most vocal about Yahoo's business.

A proxy fight is sort of like an election, with company shareholders voting to appoint competing candidates to the board of directors. The company asks shareholders to vote for its directors, while the opposition fields a "slate" of alternative director candidates.

Starboard sent a letter to Yahoo's board earlier this year demanding "significant changes" across the board, including a management overhaul, and threatened that it would run a proxy fight if the company fails to make those changes.

In response, Yahoo said it would explore a possible sale of its core internet business, but recent reports suggest Yahoo has been dragging its feet, frustrating a number of interested parties.

Starboard hasn't said anything publicly yet, but it was reported last week that it hired a proxy-solicitation adviser, meaning it's taking the first steps for a proxy battle.

In a proxy-fight scenario, shareholders will start lobbying for each other's support, and put things up for a vote at Yahoo's shareholders meeting in the summer.

Settlement

But the more likely scenario is a settlement between Yahoo and the activist investors.

According to Eric Jackson, a hedge fund manager who recently shared a critical 99-page presentation about Yahoo, Starboard is coming from the position of strength, citing some of the conversations he's had with the "majority" of Yahoo's top 20 shareholders.

"I haven’t spoken to one person who believes in what management is doing," Jackson told us. "There’s no sympathy for the board. I think most people are just fed up that the whole process has dragged on for so long," Jackson told us.

Canyon Capital, one of the 20 largest Yahoo shareholders, wrote a letter to Yahoo's board this week, urging a faster sales process and a more engaged board. In a recent note, SunTrust analyst Robert Peck called Yahoo a "melting ice cube" and added that there's a "need for speed," urging Yahoo's board and current management to step up their communication with potential buyers to honor their fiduciary duty.

Jackson said Yahoo is probably aware that they're not in a favorable position if it comes to a proxy fight, and will conclude that it's better to accept the terms requested by Starboard, including giving Starboard a few new board seats.

"At this time, we think activist shareholders are likely to engage the Board and/or management in trying to negotiate a settlement," Peck wrote in a note.

Frank Quattrone. REUTERS/Shannon Stapleton

Wild Card

One interesting twist to the deal is Frank Quattrone, the legendary dealmaker who's reported to have been hired by Mayer recently. It's unclear what role Quarttrone is playing with regards to the sale of Yahoo, but some reports indicate that he's been reaching out to buyout firms, acting on behalf of Mayer, about a deal that would work more in favor of Mayer.

"He's the big mystery," Jackson said. "I’ve heard from insiders that he's working closely with Mayer."

Mayer's also reportedly met big Yahoo shareholders, like Millennium Partners and Mason Capital, on a recent trip to New York.

But the hiring of Quattrone seems to be causing a rift between Mayer and Yahoo's board, which recently formed an independent committee to explore a sales on its own.

According to the New York Post, Mayer and the rest of the company's board members are not on the same page, creating a "totally dysfunctional situation." Quattrone isn't part of the independent committee formed by the board.

But before all this happens, there's always the chance of Yahoo getting bought by someone else. Companies like Verizon and AT&T have been rumored to be interested in an acquisition, and if that happens, no one knows what will happen with Mayer or Yahoo.