Yahoo! shares have lost around 30 percent of their value in the past year.

Microsoft set the clock ticking for Yahoo to accept its $ 41 billion buyout offer in a letter to the Internet pioneer’s board Saturday, warning that if a deal wasn’t reached by April 26 the software maker would launch a hostile takeover at a less attractive price.

Yahoo’s board formally rejected Microsoft Corp.’s bid in February, saying it undervalues the company.

Microsoft Chief Executive Steve Ballmer wrote ,”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,”also “If we are forced to take an offer directly to your shareholders, that action will have an undesirable impact on the value of your company from our perspective which will be reflected in the terms of our proposal,”

In the letter, Ballmer said Yahoo’s search share and page views, two measures of the strength of the Web portal company’s business, appear to have fallen since the offer was made at the end of January. At the time, Microsoft’s cash-and-stock offer was valued at $ 44.6 billion, or 62 percent above Yahoo’s market value. Judging by Friday’s closing share prices, the deal is now worth just under $41 billion.

Since then, the Silicon Valley company has explored alliances with Google Inc., News Corp.’s MySpace.com and Time Warner Inc.’s AOL, but no alternative to Microsoft’s offer has surfaced.

The Yahoo still didn’t answer

“This is despite the fact that our proposal is the only alternative put forward that offers your shareholders full and fair value for their shares,” Ballmer wrote in the letter. Ballmer said the Microsoft offer has grown stronger as the economic climate has weakened.

Microsoft has said from the start that it would consider all possible ways of getting the deal done, including taking its offer directly to Yahoo’s shareholders, as well as working to elect its own candidates to fill Yahoo’s board at the company’s annual annual shareholder meeting, and thus the deadline for Microsoft to nominate its slate.

Yahoo has not set a new date for the meeting. Before Saturday, it was known that Microsoft had hired a proxy solicitation firm to help with a hostile bid, but the software maker had made no pronouncements as to when that might happen.

Categories: Business
Tags: microsoft, Shares, yahoo