Microsoft walks away from Yahoo

[joyvy67]

Software giant Microsoft has dropped its three-month-old bid to buy internet firm Yahoo because the two sides cannot agree on an acceptable sale price.

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Microsoft chief executive Steve Ballmer formally withdrew the offer in a letter to Yahoo chief executive Jerry Yang.
Mr Ballmer said Microsoft had raised its original offer from $44.6bn to $47.5bn (£24.1bn) - $33 per share.
But he added that Yahoo had insisted on at least $53bn, or $37 a share - more than Microsoft was prepared to pay.
The software giant had wanted to do a deal to be able to compete with Google, which dominates the lucrative market for internet advertising.




This market was worth $40bn in 2007 and is predicted to double to $80bn by 2010.

[joyvy67]

Microsoft has said it is considering a deal with Yahoo which would not involve a full buyout of the company

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Microsoft's previous offer to buy Yahoo for $33 a share - a figure which valued the company at $47.5bn (£24.36bn) - was turned down.
Last week Yahoo rebuffed billionaire investor Carl Icahn's plan to oust the current board over the failed merger.
Now Microsoft says it is discussing with Yahoo an alternative transaction, but did not provide any detail.

'Stockholder value'
In a statement, Microsoft said it "is not proposing to make a new bid to acquire all of Yahoo at this time, but reserves the right to reconsider that alternative".
It issued the statement, it said, "in light of developments" since the company withdrew its bid two weeks ago.
Microsoft stressed that a deal may or may not follow from Sunday's statement.
After Microsoft's statement, Yahoo confirmed it was looking at a number of "value maximising" alternatives with Microsoft, and would assess offers made by the firm.
The internet firm said its board would evaluate each of the alternatives "including any Microsoft proposal... with a focus on maximising stockholder value".
Analysts say any agreement could save Yahoo from having to fight a battle with Mr Icahn, who is amassing a stake in the company in an attempt to force out the current board.
Mr Icahn's manoeuvre on Thursday followed much criticism over Yahoo's decision, led by co-founder and chief executive Jerry Yang, to turn down Microsoft's offer earlier this month to buy the company.
Yahoo had wanted Microsoft to increase its bid of $33 a share to $37.
Yahoo has also been looking into an alliance with internet giant Google, and the firms recently tested an advertising partnership for two weeks.
If they were joined together this would make Yahoo a less likely target for acquisition, analysts say.

[hhung84]

i knew it

[joyvy67]

Yahoo has agreed a deal with Google which will see Yahoo use the search engine giant's advertising technology.


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Under the agreement, Google ads will appear alongside some Yahoo search results in the US and Canada.
The announcement came after Yahoo said it had failed to persuade Microsoft to renew its bid to buy all of the internet company.
Recent talks concluded after Yahoo rejected a Microsoft proposal to buy just its online search business.


Potentially lucrative
Yahoo said the agreement with Google could be worth up to $800m (£410m) in additional revenue every year.

"This commercial agreement provides Yahoo with the opportunity to deliver more relevant ads to users and provide advertisers and publishers with better advertising technology," said Eric Schmidt, Google chairman and chief executive.
"We believe that the convergence of search and display is the next major development" in online advertising industry, said Yahoo chief executive Jerry Yang.
The partnership will initially last for three years, but could last up to 10 if Yahoo decides to renew.
Google said the deal did not need regulatory approval but that it would delay its implementation by up to three and a half months to give the US Department of Justice a chance to review it.
However, the deal is likely to attract attention from competition regulators in Washington, according to the BBC's technology correspondent Rory Cellan-Jones.
"Alarm bells were already ringing on Capitol Hill over Yahoo's 'limited' trial in April of Google's technology," he said.


Alternative deal
The markets closed before the Google deal was announced. Shares in Yahoo had closed down 10% after it said its attempts to revive Microsoft's $47.5bn (£24bn) offer for the whole of Yahoo had been unsuccessful.
The shares fell as low as $22.50 earlier in the trading session, their lowest level since the software giant first offered $31 a share for Yahoo in January.
Yahoo rejected a new proposal from Microsoft to buy just its online search operations.
“In the weeks since Microsoft withdrew its offer to acquire Yahoo, the two companies have continued to discuss an alternative transaction that Microsoft believes would have delivered in excess of $33 per share to the Yahoo shareholders," Microsoft said in a statement.
"This partnership would ensure healthy competition in the marketplace, providing greater choice and innovation for advertisers, publishers and consumers," the company said.
Yahoo, however, did not want to sell off only one part of the business.
It said such a deal "would not be consistent with the company's view of the converging search and display marketplaces".
Microsoft sources told the BBC's Rory Cellan-Jones that the company was no longer interested in a full takeover because Yahoo had been "underperforming" and was losing some of its key staff.
Yahoo's shares closed 10% lower at $23.52, while Microsoft finished 4.1% higher at $28.24.