Yahoo to rebuff Microsoft

Yahoo! Inc, the Internet company that has failed to crack Google Inc's dominance of Web search, plans to reject a $44.6 billion takeover bid from Microsoft Corp, a source said.

The board spent a week reviewing the $31-per-share unsolicited offer before deciding it was too low, and directors are likely to reject it today, said the source, who declined to be identified because the discussions aren't public. Yahoo wants at least $40, the Wall Street Journal reported on Saturday.

The decision steps up pressure on co-founder Jerry Yang to present investors with a strategy to revive a stock that lost half its value in the two years before the offer. He may look to outsource its search efforts to Google or find another buyer, though analysts said it is unlikely that any other options will emerge and Microsoft may make a higher offer to win.