Even with Yahoo's rejection to Microsoft's 44.6-billion-U.S.-dollar unsolicited bid to buy the company, Microsoft is still moving forward with the proposal and may take the bid straight to shareholders.

In a statement, Microsoft said it was unfortunate that Yahoo did not embrace their full and fair proposal to combine the two companies, and Microsoft was confident that moving forward promptly to carry through a transaction was in the best interest of all parties.

Some analysts said Microsoft, wary of alienating its own shareholders by raising the price too high, may initiate a hostile takeover and court Yahoo investors that are willing to press the company's board.

On Monday, Yahoo formally rejected Microsoft's offer, saying the offer was not in the best interest of shareholders, but adding it was willing to look at other options.

Microsoft offered 31 US dollar a share for the firm in a cash and stock bid on Feb. 1 - a 62% premium from the previous day closing price for Yahoo.

But Yahoo said their board believed that Microsoft's proposal substantially undervalued Yahoo, including their global brand, large worldwide audience, and significant recent investments in the advertising platforms.