February 12, 2008, 4:05 pm By Michal Lev-Ram Now that Yahoo has officially spurned Microsoft’s $44.6 billion buyout bid, Yahoo shareholders are coming out of the woodwork. Judging by what the most vocal ones have said so far, it’s clear they believe that selling — albeit at a higher price — is the way to go. On Tuesday, Legg Mason fund manager Bill Miller, representing Yahoo’s second-largest stockholder with 80 million shares, wrote in letter to his investors that he expects Microsoft (MSFT) to “do what it takes” to buy Yahoo (YHOO) and that the Sunnyvale, Calif.-based company is “in a tough spot if it wishes to remain independent.” “Yahoo’s Board has pledged to give the offer careful consideration and to do what they believe will deliver the most long-term value to Yahoo owners,” wrote Miller. “That is the right message, and we are waiting to hear their views as they develop. That said, we think it will be hard for Yahoo to come up with alternatives that deliver more value than Microsoft will ultimately be willing to pay.” Eric Jackson, president of an activist investment firm called Ironfire Capital and a Yahoo shareholder, wasn’t quite as gentle. “We believe the Yahoo board does not have the moral authority to represent our views as shareholders in discussions with Microsoft or any other company who wants to buy Yahoo,” Jackson wrote on his blog in an appeal to other Yahoo shareholders. Jackson, who last year campaigned to oust former Yahoo chief executive Terry Semel, started petitioning other shareholders last Sunday. Investors can make an informal “pledge” to add the Yahoo shares that they own to Jackson’s “Yahoo Plan B Group.” So far, the Naples, Fla.-based investor says he’s persuaded 130 shareholders to sign up. Combined, they have about 2.2 million shares — fewer than 1% of Yahoo’s total outstanding shares. “This shareholder group is concerned that Yahoo’s management and board wants to remain independent and wants to fight Microsoft,” Jackson told Fortune. “Rather than sit back and watch this board supposedly acting on behalf of our interest, we want to make it clear that we want a deal – whether it’s with Microsoft or someone else.” Yahoo’s largest shareholder, Capital Research, has yet to state its opinion publicly, though it was reported Microsoft CEO Steve Ballmer met with its fund managers last week.