Yahoo called Microsoft's threat of a hostile takeover "counterproductive" on Monday, while also saying it is open to a deal but only at a higher price.
In a letter addressed to Microsoft CEO Steve Ballmer, Yahoo's CEO Jerry Yang and Chairman Roy Bostock said Microsoft has mischaracterised the negotiations since the initial offer was made, and that the two companies have had "constructive conversations."
"We consider your threat to commence an unsolicited offer and proxy contest to displace our independent board members to be counterproductive and inconsistent with your stated objective of a friendly transaction," the letter said.
Yahoo said Microsoft's falling stock price has devalued the value of the proposal. Microsoft offered Yahoo a cash-and-stock deal worth $44.6 billion.
Yahoo's response comes two days after Microsoft sent an open letter giving the company three weeks to agree on a deal. If one isn't reached, Microsoft said it will take its offer to Yahoo's shareholders in order to oust the company's board.
If that happens, Microsoft said it would also lower its offer.
Microsoft's claims that Yahoo has refused negotiate are wrong, Yahoo said, while taking a jab at Ballmer.
"Steve, you personally attended two of these meetings and could have advanced discussions in any way you saw fit," the letter said.
Yahoo also wrote that it had released a three-year financial and strategic plan and maintained it could meet its forecasts.
The company also noted its announcement on Monday of a new advertising management platform called AMP. The Web-based platform is designed to make it easier for publishers to manage and sell ad space on their Web sites.
"We have continued to launch new products and to take actions which leverage our scale," the company said.
Yahoo also said Microsoft has not responded to requests for more information on antitrust issues since a deal would be subject to regulators.
"To date, you have still not provided any of the requested information," the letter said.