Time is running out for Yahoo: Shareholders are starting to agitate, competitors are reportedly poaching employees and, following the rejection of its $44.6 billion bid for the Internet pioneer, Microsoft may be on the verge of instigating a hostile takeover.

What’s more, it appears Yahoo has few defenses — if any — against the software giant. That’s partly because Yahoo (YHOO) does not have a “staggered” board, meaning all 10 of its directors are up for re-election at the company’s annual shareholders meeting this spring. That makes Yahoo particularly vulnerable to a proxy battle, should Microsoft (MSFT) decide to start one by nominating pro-Redmond board candidates by the March 14 deadline and campaigning for investors’ votes.

If Microsoft opts for a hostile takeover, Yahoo does have some limited safeguards in place to protect itself. According to company documents filed with the Securities and Exchange Commission, its so-called “poison pill” is a rule that states the company can issue new shares at a reduced price if a hostile “acquiring person” buys 15% or more of its common stock. Should Microsoft make a tender offer to shareholders, those extra shares would make it harder for it to obtain a majority quickly. But it would only stall the inevitable — because of the structure of Yahoo’s board, Microsoft would nominate a slate of board candidates and try to get them elected at the annual shareholders meeting when it is called sometime this spring.

Other possible scenarios — such as a white knight emerging to rescue Yahoo, entering some kind of outsourcing deal with Google or trying to turn things around on its own — seem increasingly unlikely. While rumors of another potential buyer or partner (including News Corp. (NWS) and AOL (TWX), which is owned by Time Warner, Fortune and CNNMoney.com’s parent) have been circulating the Web, so far no one has tried to outbid Microsoft, and it’s not clear if any other company would benefit from such an acquisition.

What’s more, even if another suitor does emerge, it’s likely Yahoo will just use that as a tactic to try and get Microsoft to up its offer. As for a commercial partnership with Google (GOOG), that would likely pose antitrust issues of its own, not to mention that its long-term benefit to Yahoo is murky at best. An independent Yahoo is also unlikely to survive — shareholders had already begun to lose faith in the company’s ability to turn things around well before Microsoft announced its offer.

On Tuesday, Legg Mason fund manager Bill Miller, representing Yahoo’s second-largest stockholder with 80 million shares, wrote in a letter to his investors that the company is “in a tough spot if it wishes to remain independent.” Activist investor Eric Jackson told Fortune he doesn’t believe in a “go it alone” approach. Both shareholders said they expect Microsoft to push forward, one way or another.

The danger for both predator and prey is that a hostile takeover will send valuable Yahoo employees heading for the door. Harvard law professor Guhan Subramanian says that there is there is an “old conventional wisdom” that you don’t make a hostile bid for technology companies. Why? Because, as Subramanian says, “the most valuable assets — employees — leave the building every night.”