SAN FRANCISCO - Brushing aside the threat of a disruptive takeover battle that could batter its shaky stock, Internet pioneer Yahoo Inc. on Monday reiterated its refusal to sell to Microsoft Corp. for less than $45 billion.

Yahoo's defiance, spelled out in a letter to Microsoft Chief Executive Steve Ballmer, marked the latest twist in a tug-of-war pitting two high-tech icons trying to mount a more formidable challenge to online search and advertising leader Google Inc.

The increasingly tense struggle now appears to have reached a turning point after more than two months of mostly behind-the-scenes maneuvering.

Analysts believe the two rivals will either broker a friendly transaction before the end of the month or wrestle for the allegiance of Yahoo's shareholders in a showdown that could drag into the summer.

Most people following the saga still seem to think Microsoft -- the world's richest tech company -- holds the upper hand over Yahoo, which has been mired in a two-year slump and unable to find an alternative deal that would trump Microsoft's original offer of $44.6 billion, or $31 per share.

"They both have some leverage, but the greatest leverage still appears to rest with Microsoft," said Morton Pierce, a Washington lawyer who advises on corporate mergers and acquisitions.

Ballmer turned up the heat on Yahoo over the weekend by setting an April 26 deadline for the Sunnyvale, Calif.,-based company to accept Microsoft's offer.

If Yahoo's board doesn't relent, Ballmer threatened to lower Microsoft's bid and ask Yahoo's shareholders to replace the 10 directors resisting a takeover in a "proxy" contest.

Yahoo Chairman Roy Bostock and Chief Executive Jerry Yang, also a member of the company's board, fired back Monday in a letter that criticized Ballmer for not doing more to advance negotiations.

Ballmer attended at least two of the meetings held between Microsoft and Yahoo, according to Bostock and Yang.

The letter didn't rule out further discussions as long as Ballmer is prepared to sweeten the unsolicited offer, which Yahoo first demanded in early February after its board unanimously concluded the bid wasn't high enough.

"We are steadfast in our commitment to choosing a path that maximizes stockholder value and we will not allow you or anyone else to acquire the company for anything less than its full value," Bostock and Yang told Ballmer. Microsoft had no immediate response to the Yahoo letter.

The letter didn't specify how much Yahoo believes it's worth, but some analysts have estimated that Microsoft could afford to pay as much as $34 or $35 per share -- about $50 billion -- to end the impasse without further acrimony.

"Microsoft will raise the offer in the end," said Friedman, Billings, Ramsey & Co. analyst David Hilal. "This deal is too important to Microsoft for it to fail."

Other analysts doubt Microsoft will budge.