Yahoo Sets July 3 For Annual Meeting

Sunnyvale, CA (AHN) - Yahoo said Monday it will hold its annual meeting July 3, an event expected to spark debate from investors upset that the Internet company rejected Microsoft's takeover bid.

Following a weekend breakdown in negotiations between Yahoo and the software giant, the Internet company's shares Monday slid, erasing almost 50 percent of the gains made after Microsoft's original January offer.

The Internet company also faces an investor lawsuit which charges Yahoo leaders failed to act in shareholders ' best interests by rejecting Microsoft.

Although Microsoft sweetened its original bid to $33, Yahoo's CEO said Monday the Internet company's board was holding out for $37 and was surprised when the software giant walked away from weekend negotiations.

Now investors are voicing skepticism Yahoo's Jerry Yang can turn around the company after Microsoft's departure.

"We are not willing to give (Yahoo) the benefit of the doubt that they can make meaningful improvement over the next three years," UBS analysts noted.

Other analysts believe Microsoft may return when Yahoo has 'softened up' and is more open to a lower price.