The New York Post cited sources close to the company as saying that Yahoo's board is divided on whether or not to accept Microsoft's offer.
The debate is said to be between Yahoo co-founder and chief executive Jerry Yang and board chairman Roy Bostock.
Yang reportedly wants to avoid Microsoft's offer and look elsewhere for a deal to remain independent. Bostock and his backers feel that the Microsoft offer is in the best interest of Yahoo's shareholders.
When news of Microsoft's bid broke earlier this month, analysts speculated that Yahoo's old brass would look elsewhere for a deal rather than submit to Microsoft. Much of the resistance is said to stem from a difference in corporate cultures.
Riding the wave of the first dotcom boom, Yahoo was one of the first companies to adopt the informal corporate structure that came to symbolise Silicon Valley in the late 1990s.
Microsoft, tucked away in Redmond, Washington, was viewed by many as a lumbering giant with dated methods.
In looking to stave off Microsoft's takeover attempt, Yahoo has turned to several former rivals.
Most recently, Yahoo has been linked with Rupert Murdoch's News Corp. Rumours suggest that News Corp would hand over control of social networking site MySpace in exchange for a 20 per cent stake in Yahoo.
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