Yahoo CEO Jerry Yang repeated in a letter dated April 7 that Microsoft's bid undervalues the company.
Addressing Microsoft CEO Steve Ballmer as "Steve," Yang added that the company's board "continue[s] to believe that your proposal is not in the best interests of Yahoo and our stockholders."
Yang also admonished Ballmer for misrepresenting the state of negotiations between the two companies.
"We regret to say that your letter mischaracterizes the nature of our discussions with you. We have had constructive conversations together regarding a variety of topics, including integration and regulatory issues," the letter states.
However, the letter is also significant because it states that Yahoo is not opposed in principle to a deal with Microsoft. Yang maintained in the letter that Microsoft's initial bid undervalued Yahoo and added that Microsoft's current valuation has also suffered since the initial bid, making its offer even less attractive.
In defending Yahoo's value, Yang pointed to a three-year plan the company recently unveiled, as well as recent strategic moves.
His letter, while somewhat conciliatory, can also be seen as the outlines of a defense that Yang can take to shareholders in the event that Microsoft follows through with its threat to begin a proxy fight.