After a week of speculation, the unofficial word from a meeting at Yahoo! on Friday was that the offer from Microsoft would be rejected for being too low. This was confirmed today. This could be the first stage of negotiations that will eventually result in the hoped for sale to Microsoft, or the software giant will eventually lose interest if the required price goes too high.

Yahoo! have said that the initial offer is far too low and that Microsoft are clearly trying to take advantage of the recent poor results at Yahoo! and claim the business at a bargain price. In return, Microsoft says that they will continue pursuing the business through all possible channels and are likely to make more approaches to Yahoo!'s shareholders to gain acceptance of a strong offer.

This story is likely to run and run and be one of the main developments in the Internet and search market during 2008.