Microsoft first approached Yahoo with a takeover proposal in January, but has met stiff resistance. Yahoo has unveiled a string of initiatives aimed at convincing shareholders of the merit of resisting Microsoft ownership.
Three weeks ago, Microsoft chief executive Steve Ballmer gave Yahoo an ultimatum to accept the bid by midnight yesterday, but with that deadline now passed, it now has to decide whether to walk away from the bid.
Observers believe Microsoft could now seek to increase pressure on Yahoo for a deal, by trying to get supportive voices onto Yahoo's board - a so-called proxy battle.
Last week, Microsoft's chief financial officer Chris Liddell warned that if no deal was reached by the end of last weekend, Microsoft would reconsider its offer and reveal new plans.
He said: "Unless we make progress with Yahoo towards an agreement by this weekend, we will reconsider our alternatives. These alternatives clearly include taking an [hostile] offer to Yahoo shareholders, or to withdraw our proposal and focus on other opportunities both organic and inorganic."
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