Microsoft's decision to drop its bid to buy Yahoo is putting shareholder pressure on the net portal to justify its asking price, the BBC's Maggie Shiels reports from Silicon Valley.
Yahoo's shares are expected to fall in Monday's trading
Yahoo's second biggest shareholder says he would have considered selling to Microsoft for slightly more than the final offer of $33 a share.
"Had there been a full deal on the table at $34 [£17] or $35, we would have had to take a look at it," said Bill Miller of Legg Mason.
Yahoo was holding out for $37 a share.
At the same time Mr Miller was looking to Yahoo to buy back billions of dollars' worth of shares to shore up confidence in the internet portal:
"You can't maintain that $33 undervalues your company, have your stock trade below that and not buy back stock."
Legg Mason owns around 7% of Yahoo shares and is the second-largest holder of stock behind Capital Research and Management.
'Bevy of lawsuits'
The fallout over the Microsoft deal does not end there.
At the moment there are about seven lawsuits in the pipeline over Yahoo's handling of the Microsoft offer, dating back to the company's initial refusal of a deal in February.
Those lawsuits are set to increase in number says Mike Arrington of TechCrunch.
"I expect a bevy of lawsuits to materialise out of thin air over the next week from Yahoo shareholders," he said.
"It's a bleak couple of days for Yahoo unless they have a trump card like some deal with AOL or a search deal with Google to try and stop a billion-dollar-plus loss in their market capital."
Yahoo's tactics and the subsequent decision by Microsoft to pull its $47.5bn offer off the table have angered some shareholders, who are threatening to withhold backing for Yahoo directors come their annual meeting, which is expected in July.
Dr Eric Jackson is the President of Ironfire Capital, an activist investment firm in Florida. He also leads Plan B, a group of about 140 outspoken shareholders. In total, they own roughly 2m Yahoo shares.
Dr Jackson says he is planning to launch a "withhold vote" campaign and hopes to run for a board seat when shareholders meet in a couple of months.
"I'm definitely interested in throwing my hat into the ring," he said.
"And whether it's me or other people who get elected that's fine. Yahoo's current board definitely needs new blood."
So what does the future hold for Yahoo and Microsoft?
Microsoft wanted Yahoo so it could compete with Google
Robert Scoble is a blogging pioneer and formerly worked as a technical evangelist at Microsoft. He told BBC News that Yahoo is looking weak at the moment and has to come out fighting.
"Yahoo is a bleeding animal," he said.
"From the outset, it was clear they didn't want to be bought by the beast in Redmond but now Yahoo is gasping for breath."
Mr Scoble thinks Yahoo's founder, Jerry Yang, has a small window of opportunity to turn things around if it does not want to remain vulnerable.
"If I was Jerry Yang I would go on the offensive and talk about what they are doing and where they are going with the company," he said.
"Put out a unified front and talk about how to keep talented employees. Talk about the products.
"They have a lot of assets that are interesting. They have 350 million people on e-mail, are Number Two in search, have cool brands like Flickr and Delicious, and are still making good profits."
Charlene Li, principal analyst with Forrester Research, agrees decisive action is needed:
"Yahoo has been given a reprieve but it must explain and execute on a strategy that supports their belief that the company is worth $37 a share or face another round of acquisition attempts and shareholder revolt."
Insiders say Yahoo is likely to push for an advertising partnership with Google.
Such a relationship would be seen as a big winner following the Microsoft saga and help boost Yahoo's operating performance in the near term.
It is also being said that Yahoo is still considering a deal with another internet media and advertising major, AOL.
Meanwhile, Microsoft still has over $50bn burning a hole in its pocket now that the Yahoo deal has been benched.
But that does not mean to say there are not other possible acquisitions out there.
Last week, chief executive Steve Ballmer told the Wall Street Journal which other companies interested him besides Yahoo.
"Look at all the properties on the internet, everything on the internet," he said.
"There's really only five or six that really have any scale. Worldwide you'd maybe get six or seven."
Those companies include News Corp's MySpace, Facebook Inc, Yahoo, Google, Time Warner Inc's AOL and Microsoft's MSN service.
Of course one other option is for Microsoft to hold its nerve in the hope that investors will eventually put enough pressure on Yahoo to accept the bid.
Patrick McGurn is special consul at Institutional Shareholder Services, a corporate watchdog that advises investors how to vote on proxy issues.
"I think what you're going to see is extreme pressure on Yahoo's board, and management in particular, to prove that they were justified in turning away what might be the best offer available," he said.