Yahoo!, the struggling Internet giant, has delivered a major snub to Microsoft even as the latter bids to take over the firm. Yahoo! declared it was opting to become part of a Google-led social networking initiative. It has turned down till this point at least, Microsoft’s $45 billion cash & shares offer, stating it actually undervalues the firm.

With its latest step, Yahoo! further delayed the software giant’s takeover move. It snubbed Microsoft by signing up to Open Social. It’s the Google-led consortium that aims to make it convenient for software developers writing new applications for networking sites like MySpace.

The move is the latest one in a series by Yahoo! after Microsoft’s $31 dollar-a-share bid was first announced publicly. Yahoo! Recently announced it was expecting revenues in keeping with analyst estimates for the year, and forecast a 25% growth in revenues next year.

Google is Microsoft’s great and probably the biggest rival in the expanding market for Internet searches and other services. Eric Schmidt, its chief executive, has made significant attempts to thwart the proposed takeover of Yahoo!. This includes speaking to his Yahoo! counterpart for discussing a partnership through that the two firms might fend off Microsoft.