Yahoo! Inc. remained silent as a deadline to respond to Microsoft Corp.'s merger offer came and went. Microsoft had given Yahoo! three weeks to respond to its $44.6 billion offer, but received no reply. Yahoo! has already said that the offer undervalues the company, though Yahoo! CEO Jerry Yang has said he does not object to a merger in principle and would agree at the right price. Microsoft must now consider whether it will take the bid hostile by asking Yahoo!'s shareholders to select a new board more friendly to the merger. Microsoft has said that this option, called a proxy contest, might cause it to lower the price it is offering for Yahoo! as such a fight might drive valuable employees from the company, lowering its value. Analysts note that while Microsoft would prefer not to take the bid hostile, it is likely to do so if left with no other option. Yahoo! has been busy trying to find alternatives to Microsoft and has held discussion with News Corp., owner of MySpace, and Time Warner, owner of AOL. Yahoo! has also spoken to Google Inc. about an advertising partnership, though such a deal would likely attract the attention of regulators. Finding an alternative to Microsoft is crucial if the management wants to keep the company independent, analysts say. Microsoft has also dropped hints that it might lower its offering price, which would send Yahoo!'s share price down and put pressure of Yahoo! to accept a deal. Analysts predict that eventually Microsoft will succeed in acquiring Yahoo!.