Yahoo board will rebuff $44b Microsoft bid, says source

Yahoo's board will reject Microsoft's $44.6 billion takeover bid after concluding the unsolicited offer undervalues the slumping internet pioneer, a person familiar with the situation, quoted by an Associated Press report, said.

The decision could provoke a showdown between two of the world's most prominent technology companies with internet search leader Google looming in the background, the Associated Press report said.

Leery of Microsoft expanding its turf on the internet, Google already has offered to help Yahoo avert a takeover and urged antitrust regulators to take a hard look at the proposed deal, the report added.

If the world's largest software maker wants Yahoo badly enough, Microsoft could try to override Yahoo's board by taking its offer, originally valued at $31 per share, directly to the shareholders, the report said.

Pursuing that risky route probably will require Microsoft to attempt to oust Yahoo's current 10-member board.

Alternatively, Microsoft could sweeten its bid. Many analysts believe Microsoft is prepared to offer as much as $35 per share for Yahoo, which still boasts one of the internet's largest audiences and most powerful advertising vehicles despite a prolonged slump that has hammered its stock.

The rpeort further said Yahoo's board reached the decision after exploring a wide variety of alternatives during the past week, according to the person who spoke to The Associated Press.

Microsoft and Yahoo declined to comment.