WebProNews

Microsoft won't take the brushoff from Yahoo, making the next move an interesting one to contemplate. As expected, Microsoft responded to Yahoo's rejection by suggesting they will keep moving forward with the takeover.

"The Yahoo response does not change our belief in the strategic and financial merits of our proposal. As we have said previously, Microsoft reserves the right to pursue all necessary steps to ensure that Yahoo!’s shareholders are provided with the opportunity to realize the value inherent in our proposal," Microsoft said in their statement.

Microsoft called Yahoo's answer "unfortunate" and said moving forward would be in the best interests of all parties. This includes the various shareholders for Yahoo as well as Microsoft, the company suggested.

Yahoo faces a cold economic reality. Institutional investors hold roughly 75 percent of the company, and Yahoo's share price dropped by over half, from $43.21 on January 6, 2006, to $19.05 on January 30, 2008.

Despite a revamped paid search service, weakness in the automotive and financial display advertising business has plagued Yahoo for several months. We find it hard to believe Yahoo's shareholders will agree with Jerry Yang and not back Microsoft's offer.