Microsoft withdraws its bid for yahoo

May 3rd, 2008 by Sita ! 126 views

Microsoft has withdrawn its bid for yahoo. Yahoo killed the deal by not accepting microsoft’s offer even after they increased the bid by additional $5 billion. See the press release here. Contrary to popular belief, microsoft decided not to go the hostile way as that would have led to serious value erosion in yahoo.

In a letter to microsoft employees, steve ballmer has outlined microsoft’s strategy going forward. It basically involves 3 components
· Deliver on the basics. We will continue to improve search relevance and build out our ad platform.


· Change the game through innovation. We will expand investments in engineering and deliver transformative tools and Web experiences.

· Expand our global scale and focus. We will pursue partnerships and investments to realize the competitive advantages that come with scale.

There was a significant increase in yahoo’s share price in anticipation of the acquisition. There will be blood on the street on monday, once the trading resumes.