It’s been a little over a week since news broke that Microsoft offered to acquire Yahoo for $44.6 billion. Their offer translated out to about $31 dollars per share which many people had said was too low for a company that was trading at that price not long ago. Sure enough, Yahoo felt that the offer undervalued them and formally rejected Microsoft. In a document filed with the SEC, they said that Yahoo’s Board of Directors “carefully reviewed Microsoft’s proposal and has unanimously concluded that the proposal is not in the best interests of Yahoo! and our stockholders.”

So will Microsoft come back with a more lucrative offer? If they do what analysts expect them to, they’ll be coming back with an offer of around $35 to $40 per share. Another route they could take would be to do some heavy lobbying directly with the shareholders. If they really wanted to, they could take their original offer directly to the shareholders. The Associated Press said that “if it goes down that route, Microsoft might have to antagonize Yahoo by trying to oust the 10-member board that rejected the original offer.”

It sounds like this is just the start of what could be an extremely long and drawn out process.  Microsoft isn’t going to give up, and if they do finally manage to come to an agreement with Yahoo’s Board of Directors and/or shareholders, they’ll still have to deal with the Department of Justice.  Remember, the DOJ has already said that they are “interested” in looking into this deal for possible antitrust issues. It looks to me like Microsoft is going to have a lot of work ahead of them if they want all that Yahoo has to offer for keeps.

For now, Yahoo says no to becoming “Microhoo.”