Wall Street expects Microsoft to enter a protracted period of "trench warfare" in its attempt to buy Yahoo after the failure of its three-month-long attempt to bring the online company's board to the negotiating table. It is expected to launch a proxy battle and try to oust the Yahoo executive team while encouraging investors to accept its original $31-a-share offer, with the first shot fired possibly as early as this week. With the passing, on Saturday, of the deadline that Microsoft had set Yahoo to enter into negotiations without any comment from either side, shares in both companies declined yesterday, valuing Microsoft's bid at about $42.7bn. Microsoft's chief financial officer, Chris Liddell, warned last week that if Yahoo had not started talking by Saturday the company would examine its alternatives. "These alternatives clearly include taking an offer to Yahoo shareholders or withdrawing our proposal and focusing on other opportunities," he said.