Microsoft Withdraws from Yahoo! Merger Deal

By Harshil Karia • May 5, 2008

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Microsoft Corp. withdrew its $42.3 billion bid to buy Yahoo Inc. on Saturday due to no clear meeting ground with respect to price among other things.

This has been announced after Microsoft decided to raise its initial offer despite refusing to do so for all of last week.

A final meeting occurred on Saturday at the Microsoft headquarters in Redmond, between Jerry Yang and David Filo (Co – Founders) from Yahoo, and Kevin Johnson and Steve Ballmer from Microsoft. At that meeting, Yahoo said the lowest price they could accept was $37/share. Microsoft reportedly went as high as $33/share.

Yahoo’s shares were at $19.19 when the bid was first made.

Ballmer has refused to engage in a hostile takeover under the pretext that it is “not sensible”.

Is this the end of a possible Microsoft – Yahoo! Merger? Well not necessarily, Yahoo has been quite sluggish financially for a couple of years and if their less than brilliant performance continues, then Microsoft could renew its bid this year or early next year.

Google seems to be the big winner from the fallout because a merged Microsoft – Yahoo would have been a potent threat (It has gone so far as to contact Yahoo and offer any assistance in combating Microsoft).

This may be the end of Steve Ballmer as well. Ballmer reportedly told employees at Microsoft that the deal would go through and that he would not let the board ‘crucify’ him.

Yahoo’s deal with Google for the carrying of search advertisements should be expected soon.

Categories: International
Tags: fallout, Microsoft, steve ballmer, Takeover Bid, yahoo

About the Author

Harshil Karia

Harshil is one of the Executive Directors at FoxyMoron. Often known as the 'Constant Observer', Harshil's interest lies in New Digital Media, Social Media, Web 2.0 and the Internet in general. He believes strongly in the utilitarian power of the Internet and watching that power take shape fascinates him to a large extent. He is dabbling with design enhancement as well. He pens down his thoughts on BeFoxy as well where he brings forth tools, tricks, and important 'how to' guides on being 'Foxy'. Follow him on Twitter - http://www.twitter.com/harshilkaria