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Yahoo made it official this morning, confirming reports that it's rejecting Microsoft's $44.6 billion acquisition offer. Here's the company's news release. Yahoo CEO Jerry Yang went into more detail in an e-mail to employees, filed this morning with the Securities and Exchange Commission. An excerpt:

as you'll see from the news release we issued today, our board of directors has reviewed microsoft's unsolicited proposal with yahoo!'s management, financial and legal advisors. after a careful evaluation, the board has unanimously concluded that the proposal is not in the best interests of yahoo! and our stockholders. of course, the board of directors is continuously evaluating all of its strategic options in the context of the rapidly evolving industry environment and we remain committed to pursuing initiatives that maximize value for stockholders.

we believe microsoft's proposal substantially undervalues yahoo!--including our highly recognizable global brand, large worldwide audience, significant recent investments in advertising platforms, future growth prospects, our ability to generate free cash flow and our earnings potential as well as substantial unconsolidated investments (like alibaba and yahoo! japan).

No comment yet from Microsoft. See this earlier post outlining its options.