Microsoft on Saturday issued a letter to Yahoo's board of directors saying that it is tired of waiting for the online firm to start negotiations. It will give the company three weeks to come to an agreement before it makes its case to shareholders.

The letter from Microsoft CEO Steve Ballmer claims that since the bid was placed for Yahoo, the latter has done nothing to help progress the negotiations. To make matters worse, "public equity markets and overall economic conditions have weakened considerably", lessening Yahoo's value to Microsoft since the company offered a 62 per cent premium on Yahoo's stock.

Ballmer pleads for common sense

"It is unfortunate that by choosing not to enter into substantive negotiations with us, you have failed to give due consideration to a transaction that has tremendous benefits for Yahoo's shareholders and employees," Ballmer wrote to the Yahoo board.

"We think it is critically important not to let this window of opportunity pass."

Obviously frustrated with Yahoo's conduct, Microsoft also issued an ultimatum to the board. The company said that if it doesn't "conclude an agreement" within the next three weeks, it "will be compelled to take [its] case directly to the shareholders, including the initiation of a proxy contest to elect an alternative slate of directors for the Yahoo board".

Yahoo has yet to comment on the letter, but with even greater pressure being placed on the company's board, some progress may be made before long.