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"It is unfortunate that Yahoo has not embraced our full and fair proposal to combine our companies," the company's response reads. "Based on conversations with stakeholders of both companies, we are confident that moving forward promptly to consummate a transaction is in the best interests of all parties."

Yahoo obviously disagrees, though

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analysts suggest its rejection of Microsoft's takeover could simply be a ploy to boost the offer beyond the initial $31 per share. Reports suggest that Yahoo believes itself to be worth closer to $40 per share, valuing the company at $57 billion. However, Microsoft gave no indication that it was readying itself for an improved bid.

"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 realise the value inherent in our proposal."

Yahoo is reported to be courting both AOL and Google as it attempts to strengthen its hand in the face of a takeover, however, it now appears Microsoft isn't going to take no for an answer.