It’s over – all the speculation may cease as Microsoft has decided to stop pursuing its Yahoo bid.
After Yahoo rejected its initial bid, then rejected a subsequent one, Steve Ballmer had hinted at more hostile measures. Ballmer has obviously decided that the Yahoo’s insistence on at least $53bn, or $37 a share was too high, as the BBC reported.
Microsoft had earlier offered to pay $44.6bn, increasing it to $47.5bn after the first bid was rejected.
Ballmer’s letter to Yahoo’s Jerry Yang is posted on the Microsoft site and the gist of the withdrawal can be neatly summed up thus:
“After careful consideration, we believe the economics demanded by Yahoo do not make sense for us, and it is in the best interests of Microsoft stockholders, employees and other stakeholders to withdraw our proposal.”
Though anti-Microsoft critics might rejoice, Yahoo’s financial uncertainty is now going to be a target. After Microsoft’s failed bid, there’s now room for other companies to suggest mergers or partnerships. Google has the lion’s share of advertising, Microsoft has its hold on the biggest social networking site – Facebook and what does Yahoo bring to the table? Besides a second-choice search engine, the dying Geocities and its Mail, IM and other services that unfortunately its competitors all have.
Being a better bet than AOL isn’t going to be enough to save Yahoo.