Yahoo today publicly dismissed Microsoft's $44.6 billion takeover bid, setting the groundwork for a long conflict between the firms. The search firm's Board of Directors says it has unanimously rejected Microsoft's offer after believing that the deal "substantially undervalues" Yahoo's worth. The reputation associated with Yahoo's name, its user base, ad investments and finances are all worth more than what Microsoft has proposed, according to the statement.

The company says it has turned to financial institutions Goldman Sachs, Lehman Brothers, and Moelis to help determine the fairness of the deal.

Microsoft has not yet responded to the rejection as of press time, though the news is expected to make any future takeover attempts much more difficult. A leak of the rejection notice this weekend (since proved accurate) revealed that Yahoo is taking a "poison pill" approach to the bid and is reportedly intent on preserving its independence by either rendering any deal too expensive or else turning to Microsoft rivals such as Google for an alliance that could raise antitrust concerns in the event of a Microsoft buyout.

The bid was originally proposed by Microsoft as an attempt to thwart Google, which has continued to dominate the business for online advertising as well as the still-young web app industry.