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Microsoft Drops Plans To Buy Yahoo

Microsoft announced tonight it will not be going forward with its plan to buy Yahoo, after it was clear the two sides could not agree on a price, and Steve Ballmer elected not to risk his entire career on the deal.

Here are some links about the news:

Here’s Microsoft’s press release announcing the decision. It’s clear that Microsoft raised its offer to $33 (effectively adding $4 to the deal, based on stock value, or $5 billion, and Yahoo wanted another $4, a total of $10 billion over the original offer, which Microsoft believed was unworkable.

Here’s Yahoo’s press release in response. They don’t seem at all dissapointed.

Here’s Steve Ballmer’s letter to Microsoft employees.

Now with the deal off, it looks like Yahoo could announce a deal to give its ad business to Google as early as this week. Perhaps Microsoft plans to let Google get Yahoo, and thus almost the entire market, then try to bury their big competitor under an avalanche of antitrust complaints.

I’ve never seen Techmeme so dominated by one story.

Valleywag is saying this could be the end for Steve Ballmer. God, I hope not.

Expect Yahoo’s stock price to drop like a stone, considering how it was propped up by Microsoft’s offer.

May 4th, 2008 Posted by Nathan Weinberg | Yahoo Acquisition, Corporate, Yahoo | 2 comments