Yahoo's stock dove to its lowest level in nearly five years today, magnifying the challenge facing the Internet company as its management...

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SAN FRANCISCO — Yahoo’s stock dove to its lowest level in nearly five years today, magnifying the challenge facing the Internet company as its management tries to justify its rebuff of Microsoft ‘s $47.5 billion takeover bid.

Shares fell $1.01, or 5.4 percent, 1 to $17.75, a price unseen since October 2003.

The downturn left Yahoo’s market value about $12 billion below what shareholders would have received if the company had accepted Microsoft’s takeover offer of $33 a share in May. Microsoft sweetened the offer after Yahoo repeatedly rejected an initial bid of $31 a share made in January.

Yahoo’s demands for more money eventually drove Microsoft away, angering many shareholders now worried that the company won’t be able to push the stock price back above $30 any time soon.

If Yahoo shares remain in a funk, some analysts believe the company’s board will be under increasing pressure to replace co-founder Jerry Yang as chief executive.

Yang, who also sits on the board, has already pledged to increase Yahoo’s net revenue by at least 25 percent in each of the next two years — a goal that has been greeted with widespread skepticism. Yahoo’s net revenue rose 11 percent to $2.7 billion during the first half of this year.

Two former CEOs, Frank Biondi Jr. and John Chapple, joined Yahoo’s board last month as part of a settlement with disgruntled shareholder Carl Icahn, who wanted the company to be sold to Microsoft. Icahn also recently joined Yahoo’s 11-member board.

An unusually large number of shareholders already expressed their dissatisfaction with Yang and Yahoo Chairman Roy Bostock. In a vote taken at Yahoo’s annual meeting last month, nearly 34 percent of the shareholders opposed Yang’s re-election while nearly 40 percent wanted Bostock bounced from the board.

Yahoo is hoping for a major lift from rival Google, which plans to start selling ads alongside some of Yahoo’s search results in October. Yahoo estimates Google’s superior technology will boost its annual revenue by $800 million.

But that alliance could still be challenged by U.S. antitrust regulators, who are examining whether the partnership would diminish competition in the online advertising market. Combined, Google and Yahoo sell more than 80 percent of the search advertising in the United States.

While promising to help Yahoo, Google also could hurt its rival with a new Web browser called Chrome. The free browser, released Tuesday, is designed to encourage Web surfers to use Google’s Internet-leading search engine even more — an objective that might siphon traffic away from Yahoo.