Microsoft CEO gives Yahoo board deadline for deal

SAN FRANCISCO, April 5 (Reuters) - Microsoft Corp. (MSFT.O: Quote, Profile, Research) has set a three-week deadline for Yahoo Inc (YHOO.O: Quote, Profile, Research) to accept its current $31 a share cash and stock offer or Microsoft will take its case to Yahoo shareholders, Microsoft said on Saturday.

Microsoft Chief Executive Steve Ballmer said in a letter dated April 5 and addressed to Yahoo's board of directors that "now is the time" to negotiate final terms of a deal, one which would mark the biggest takeover yet in the high-tech industry.

"If we have not concluded an agreement within the next three weeks, we will be compelled to take our case directly to your shareholders, including the initiation of a proxy contest to elect an alternative slate of directors," Ballmer writes.

A Yahoo spokeswoman was not aware of the letter and would not immediately comment on Yahoo's reaction to the move.

(Reporting by Eric Auchard in San Francisco and Daisuke Wakabayashi in Seattle)