Microsoft Drops Yahoo Bid

5/3/2008
E. Van Dril
The two companies couldn't reach an agreed upon price.

Over the past two months, it seemed like Microsoft's takeover of Yahoo would never happen. And guess what? It didn't.

Microsoft Corporation said Saturday that it had pulled its proposal to acquire Internet portal Yahoo Inc. after raising its bid to $33 per share, which came out to $5 billion above what Microsoft believed to be the company's value. But Yahoo reportedly wanted an additional $4 per share.

The offer originally made was at $31 per share, or a total of $44.6 billion. Yahoo's stock is currently worth $28.67 a share.

In a statement, Microsoft CEO Steve Ballmer said, "After careful consideration, we believe the economics demanded by Yahoo do not make sense for us."

The purpose behind Microsoft's bid was to better compete in search engine traffic with Internet monster Google. As it stands, Google has roughly half of the search engine traffic going to its site. But by Microsoft combining with Yahoo, the two figured to be able to better compete with Google.

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