Yahoo called on shareholders to back the current board
Internet giant Yahoo has defended its decision not to sell part of the company to Microsoft, saying "it made no sense financially or strategically".
Microsoft proposed buying its online search business after withdrawing an offer to buy Yahoo outright.
Yahoo is facing an attempt by billionaire investor Carl Icahn to unseat the board after it failed to do a deal with Microsoft.
It has called for shareholders' support at its annual meeting on 1 August.
"Microsoft's 'hybrid' proposal to acquire only Yahoo's valuable search business makes no sense for the company either financially or strategically," Yahoo said in a presentation to shareholders released ahead of the meeting.
Instead of doing a deal with Microsoft, Yahoo signed an agreement with Google to use its online advertising technology.
Yahoo defended that decision, saying it expects that deal to generate $250m-$450m (£125-£225m) from that deal within the first 12 months.
It criticised Mr Icahn's "ill-defined plan" for Yahoo, which it said focused on selling the firm to Microsoft "even though Microsoft has repeatedly confirmed that it is not interested in a full acquisition".
Shareholder Mr Icahn is trying to oust Yahoo's board, including the Internet firm's co-founder and chief executive Jerry Yang.
Yahoo shares fell 1.7% to $20.97 (£10.54).