Yahoo's board of directors have unanimously rejected Microsoft's proposal of a buyout, saying that it is not in the best interests of the company and its stockholders.
"The board believes that Microsoft's proposal substantially undervalues Yahoo, including our global brand, large worldwide audience, significant recent investments in advertising platforms and future growth prospects, free cash flow and earnings potential, as well as our substantial unconsolidated investments," the company said in a statement.
The board of directors said it is continuing to review its options and did not rule accepting another offer.
David Drummond, chief legal officer at rival search engine Google, said in a blog posting, "Could a combination of the two [Microsoft and Yahoo] take advantage of a PC software monopoly to unfairly limit the ability of consumers to freely access competitors' e-mail, instant messaging, and web-based services? Policymakers around the world need to ask these questions - and consumers deserve satisfying answers."