Yahoo has rejected Microsoft's $44.6 billion takover bid for being inadequate.

The bid was considered too low against current valuations and therefore did not represent good enough value for shareholders.

The deal would have had significant consequencies for mobile, given Yahoo and Microsoft's existing mobile search/advertising activities and their efforts to head off Google's own wireless efforts.

Microsoft issued a statement saying it felt Yahoo's decision was 'unfortunate'.

It added: "As we have said previously, Microsoft reserves the right to pursue all necessary steps to ensure that Yahoo's shareholders are provided with the opportunity to realize the value inherent in our proposal."

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Various analysts issued statements today saying they expect Microsoft to come bag with an improved offer.