Yahoo's chairman, Roy Bostock, is leading a group of the company's board members in favour of accepting Microsoft's unsolicited $US44.6 billion takeover bid, according to a new report.

The informal group headed by Bostock also includes other board members and billionaire investor Ron Burkle, according to the report in the New York Post, which quoted unnamed sources close to the situation. Board members Eric Hippeau, a managing partner at Softbank Capital, and Robert Kotick, CEO of Activision Publishing, are standing behind Yahoo CEO, Jerry Yang, who does not want to accept Microsoft's offer.

On Monday, Yahoo's board rejected Microsoft's offer, saying it undervalued the company.

According to the Post, the discord revolves around Yang and his followers who are so opposed to selling the company to Microsoft that Bostock and his group fear they will act out of emotions rather than their fiduciary duty to Yahoo shareholders. Such an action could expose the board to lawsuits by shareholders.

Yang sent a letter to shareholders Wednesday night, saying that Microsoft's bid substantially undervalues the company and that Yahoo is positioned to take advantage of growth in the online advertising market.

Yahoo could not be reached for comment.