Yahoo’s Board has formally rejected a fresh proposal from Microsoft to buy only its search operations. The proposal was advanced to Yahoo on Friday accompanied with a derisory deadline of only 24 hrs. Microsoft had proposed to buy Yahoo’s search operations for $1 billion and promised to pick up 16% stake in the remaining company for $8 billion.

Yahoo rejected the proposal in a press statement citing several grounds for the decision. It believes that the terms of the proposed search-operation buyout are unfavorable for the company’s stockholders. However, it has softened its earlier stance a bit and now appears to favor a full sellout at $33/share, as originally proposed by Microsoft but rejected by it. The fate of the reigning Yahoo Board of Directors, and consequently, the deal will now be decided on August 1 – board election Day.

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