Yahoo has rejected Microsofts offer to take over the search pioneer. According to the official Yahoo press release the offered $31 a share massively undervalues the organization, cash flow and earnings potential and they believe that other alternatives can be used in order to keep shareholders happy and retain control over their brand.

With Yahoo currently in the process of letting about 1000 people go from the company, those at the top owul need to cut more jobs if this deal went through. Another thing to consider is that Microsoft and Silicon Valley companies do not play well together. Seen as a mega corporation that stifles creativity and absorbs competition, Microsofts pockets can handle a sizeable counteroffer , possiblt over $40 a share that may force the hand of stockholders.

Yahoo’s alternatives are along the lines of partnerships with Rupert Murdoch’s Newscorp, Time Warner’s AOL and even their main competition Google. While a partnership with Google may sidestep anti trust laws by acting as a search/ad/ content deal, don’t expect Microsoft to hold back with throwing some legal red flags to prevent that deal. Given all the possibilities and speculations at this point one thing is certain, Microsoft is definitely Yahoo’s last resort, and one that isn’t leaving the scene anytime soon.