Yahoo investors are reportedly torn on the looming Microsoft buyout bid, with around 90-percent holding shares in Microsoft, most of which have significantly more invested in the latter. According to eWeek, this could mean that investors would be more likely to urge Yahoo to take a tangible incentive in addition to the bid, rather than potentially devaluing shares of Microsoft. Analysts expect that Microsoft may make its offer more interesting, potentially increasing the bid to $35 per share, over the initial $31.

"They may be more concerned with whether Microsoft will get caught up in a 'deal frenzy' and suffer the 'winner's curse' by overpaying for Yahoo," RiskMetrics analysts wrote in an M&A Edge Note. "Don't expect to see many of the other top Yahoo shareholders following Bill Miller's lead," the report said of Legg Mason's earlier plea for the two companies. Legg Mason is one of three Yahoo top 20 investors that have more money invested in the company than in Microsoft.

Yahoo CEO Jerry Yang wrote investors early last week, in an attempt to soothe concerns that Yahoo is not making the correct choice.