Yahoo Inc. has rejected Microsoft's latest attempt to buy its online search operations in a "take or leave it" proposal that Yahoo said would have dismantled its Internet franchise.

As described by Yahoo (nasdaq: YHOO - news - people ) in a statement released late Saturday, Microsoft (nasdaq: MSFT - news - people ) packaged its latest offer with activist investor Carl Icahn, a billionaire who is seeking to overthrow Yahoo's board of directors in a shareholder meeting scheduled for Aug. 1.

Without providing many specifics, Yahoo said Microsoft renewed an earlier bid to buy the company's search engine and proposed turning over the remaining pieces to a board controlled by Icahn