Microsoft chief Steve Ballmer said his company was still holding talks with Yahoo, although no longer about efforts to take the Internet giant.

For the second time in two months, Yahoo has rejected Microsoft's $42 billion offer. But in a rejection letter sent to Microsoft chief Steve Ballmer Monday, Yahoo said it was not opposed to a deal. Yahoo effectively stood its ground on price, pointing to the strength of its business as recently presented in its three-year outlook and calling itself undervalued by Microsoft.