SAN FRANCISCO — After fending off months of threats by Microsoft Corp., Yahoo Inc.'s directors still will have to fight for their jobs as the company's own irate shareholders plot a mutiny.

Spurred by widespread criticism about how Yahoo's board responded to Microsoft's sweetened takeover offer of $47.5 billion, an activist shareholder is trying to recruit an alternate slate of directors to present at Yahoo's annual meeting July 3.

"We are hoping to turn that (meeting) into Independence Day' for Yahoo's shareholders," said Eric Jackson, president of Ironfire Capital.

Yahoo announced in March that it was postponing the annual meeting, hoping to squelch Microsoft's threatened attempt to remove the board if the software maker decided to pursue a hostile buyout of the embattled Internet pioneer.

The specter of a hostile takeover evaporated over the weekend when Microsoft Chief Executive Steve Ballmer withdrew a 3-month-old offer after concluding that he had reached an impasse with Yahoo's board over a mutually acceptable sales price.

Ballmer verbally had offered to pay $33 per share, or $47.5 billion, up from an initial bid valued at $44.6 billion, or $31 per share. At the time the negotiations collapsed, the value of Microsoft's original offer had fallen to $42.3 billion, or $29.40 per share, because half the deal was supposed to be financed with Microsoft's declining stock.

Yahoo's board wanted $37 per share — a price that the company's stock hasn't reached in more than two years.

"It's hard to believe the board could let this happen," Jackson said. "I think they completely misconstrued the situation and thought, Microsoft is rich, so let's soak them.' They were bluffing all the way and got caught."

Yahoo declined comment Tuesday. Yahoo Chairman Roy Bostock and Chief Executive Jerry Yang — a board member — have staunchly defended their handling of the Microsoft negotiations. Both have said the board wasn't drawing a line in the sand with the $37-per-share demand.

"We engaged with them, and we wanted to find a way to get something done. But they walked," Yang said in an interview Monday.

Investors apparently are still holding out hope that Yang and Ballmer can set aside their differences and perhaps renew negotiations, even though Microsoft has been signaling that it will explore other ways to improve its unprofitable Internet operations.

The possibility of revived talks helped lift Yahoo shares by $1.35, or 5.5 percent, to finish Tuesday at $25.72.