Yahoo Inc extended its deadline to nominate board directors, gaining time to seek alternatives or negotiate friendlier terms to a $41.7 billion buyout offer from Microsoft Corp.

The original March 14 deadline could have catapulted Microsoft and Yahoo into a proxy contest next week. Instead, Yahoo said on Wednesday the deadline would fall 10 days after it announces the date for its annual shareholder meeting, which has yet to be scheduled.

Yahoo has explored tie-ups with several other Internet and media companies that would allow it to retain more independence. Talks about a deal with Time Warner Inc.'s AOL division have accelerated, a person briefed on the discussions said on Wednesday.

"It's an indication that probably Yahoo is less receptive to Microsoft than was initially believed," said analyst Jeffrey Lindsay of Sanford C. Bernstein, referring to the extension.

"It looks as if they've bought themselves several weeks by proposing this delay," he said. "It's probably the maximum they can do without incurring a lot more shareholder ill-will."

After more than a year of intermittent talks, Yahoo rebuffed an offer that Microsoft made public on February 1 valuing the company at $31 per share in cash and stock. Based on current share prices, the deal would value Yahoo at $27 per share.

Yahoo shares rose 2 percent to $28.62 in early trading on the Nasdaq, indicating that investors still expect Microsoft to sweeten its offer. Microsoft gained 2.6 percent to $28.31.