Now that Yahoo (NSDQ: YHOO) is expected to reject Microsoft’s (NSDQ: MSFT) $31 a share bid in an official letter to the company on Monday, what options does Microsoft have? We have documented some of them before, but a quick overview of them (NYT does a good job here):

-- Raising the bid: MSFT has indicated it could go up to $35 a share, even though Yahoo might be looking towards the $40 mark. If MSFT was to consider the $40 a share mark, the total bid would rise from $44.6 billion to about $56.6 billion.

-- Convincing biggest shareholders: Hedge funds, biggest buyers of Yahoo’s stock since Microsoft bid, could be open to some behind-the-scenes lobbying by Microsoft, who could ask them to put pressure on Yahoo board to accept any offer, revised or otherwise.

-- Tender offer: Microsoft may go direct, through a tender offer to shareholders, which would put even more pressure on Yahoo’s board to negotiate.

-- Hostile board overthrow: This would be the most contentious, and Microsoft has indicated its willingness to go through with this if need be: it could seek to oust Yahoo’s board at its next election; it would have until March 13 to nominate a new slate of directors. Yahoo has taken “poison pill” provisions, and Microsoft have to oust the board to get past these provisions.

Poll: Which Option Should Microsoft Take?: Vote below (RSS readers will have to click through)