(7 April 2008 9:30 pm)

MUMBAI: Yahoo on Monday has fired back at Microsoft's three-week deadline letter maintaining its stand that the offer of $44.6 billion is not in the best interests of Yahoo and its stockholders.

On Saturday, in a letter to Yahoo board of directors, Microsoft CEO Steve Ballmer had said, "If we have not concluded an agreement within the next three weeks, we will be compelled to take our case directly to your shareholders, including the initiation of a proxy contest to elect an alternative slate of directors for the Yahoo board."

In reply to Ballmer's letter, Yahoo chairman Roy Bostock and CEO Jerry Yang wrote, "Our Board's view of your proposal has not changed. We continue to believe that your proposal is not in the best interests of Yahoo and our stockholders."

Yahoo has said, ""Contrary to statements in your letter, stockholders representing a significant portion of our outstanding shares have indicated to us that your proposal substantially undervalues Yahoo!. Furthermore, as a result of the decrease in your own stock price, the value of your proposal today is significantly lower than it was when you made your initial proposal."

Yahoo did reaffirm that it is weighing all options and is open to all offers which would maximise stockholder value, including a higher bid from Microsoft.

The company said: "We are open to all alternatives that maximise stockholder value. To be clear, this includes a transaction with Microsoft if it represents a price that fully recognises the value of Yahoo!."