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 The statement comes after Microsoft warned Saturday that if a deal isn't reached by April 26 the software company will launch a hostile takeover at a less attractive price.
In premarket trading Monday, Yahooo shares fell 61 cents, or 2.2 percent, to $27.75.
Microsoft made its offer for Yahoo in late January. The deal would create a stronger rival to Google Inc.
At the time, the cash-and-stock bid was valued at $44.6 billion, or 62 percent above Yahoo's market value. As of Friday, the deal was worth just under $41 billion.
Yahoo's board formally rejected Microsoft Corp.'s bid in February, saying it undervalues the company.
Jerry Yang, chief executive of Sunnyvale, Calif.-based Yahoo Inc., and Chairman Roy Bostock sent a letter Monday to Microsoft CEO Steve Ballmer, reiterating that the current offer is "not in the best interests of shareholders" of Yahoo.
"We are open to all alternatives that maximize stockholder value," Yang and Bostock said in the letter. "To be clear, this includes a transaction with Microsoft if it represents a price that fully recognizes the value of Yahoo on a standalone basis and to Microsoft, is superior to our other alternatives, and provides certainty of value and certainty of closing."
In the letter, Yang and Bostock assert that Microsoft has mischaracterized the companies' discussions, and say the company's threat to begin a hostile takeover is "counterproductive."
Over the weekend, Balmer gave Yahoo a deadline to accept the offer.
"If we have not concluded an agreement within the next three weeks, we will be compelled to take our case directly to your shareholders, including the initiation of a proxy contest to elect an alternative slate of directors for the Yahoo board," Ballmer wrote.
"If we are forced to take an offer directly to your shareholders, that action will have an undesirable impact on the value of your company from our perspective which will be reflected in the terms of our proposal," he wrote.
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 Since initially rejecting Microsoft's bid, Yahoo has explored alliances with Google Inc., News Corp.'s MySpace.com and Time Warner Inc.'s AOL, but no alternative to Microsoft's offer has surfaced.
Ballmer acknowledged the alternative negotiations and questioned why, in the absence of another offer, Yahoo was still dragging its heels.
"This is despite the fact that our proposal is the only alternative put forward that offers your shareholders full and fair value for their shares," Ballmer wrote in the letter. Ballmer said the Microsoft offer has grown stronger as the economic climate has weakened.
"We believe that the majority of your shareholders share this assessment," despite a forecast recently released by Yahoo that calls for the company's revenue to rise more than 70 percent during the next three years, he wrote.
Microsoft has said from the start that it would consider all possible ways of getting the deal done, including taking its offer directly to Yahoo's shareholders, as well as working to elect its own candidates to fill Yahoo's board at the company's annual annual shareholder meeting, and thus the deadline for Microsoft to nominate its slate.
Earlier Monday, Yahoo released more details about its effort to become a one-stop shop for selling and distributing online display ads
-- the Internet's equivalent of billboards.
The upgrade, called "Amp," won't be available until this summer, and then only on a limited basis among more than 600 newspaper publishers trying recover some of the revenue that the Internet has siphoned from their print editions.
Yahoo siad Amp will make it easier for advertisers to aim their messages at specific demographic groups across scores of Web sites. Amp will rely heavily on data that Yahoo collects about people's preferences at its own Web site as well as other online destinations.
Yahoo's new platform will be competing against similar technology recently acquired by Google and Microsoft. Google bought DoubleClick Inc. for $3.2 billion primarily so it would have a better vehicle for selling display ads. The same objective drove Microsoft's $6 billion purchase of aQuantive.
[Associated Press; By STEVEN WINE]
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