Microsoft withdraws bid for Yahoo

By OUR CORRESPONDENT

Bangalore, May 4: Micro-soft on Saturday announced that it had withdrawn its $47.5 billion bid to buy Yahoo. The software giant had made an unsolicited bid to acquire the Internet giant for $44.6 billion on February 1, 2008 and made a last-ditch effort on Friday by raising its bid from $31 a Yahoo share to $33 a share. But Yahoo CEO Jerry Yang stuck to a demand for $37 a share, which Microsoft was not ready to pay.

"Despite our best efforts, including raising our bid by roughly $5 billion, Yahoo has not moved toward acce-pting our offer," said Microsoft CEO Steve Ballmer.

"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."

In a letter to Mr Yang on Saturday, Mr Ballmer conceded that the latter’s plan to use a ‘poison pill’ strategy against a hostile takeover bid had led him to conclude that such a bid would not be wise for Microsoft. "After giving this week’s conversations further thought, it is clear to me that it is not sensible for Microsoft to take our offer directly to your shareholders. Our discussions with you have led us to conclude that, in the interim, you would take steps that would make Yahoo! undesirable as an acquisition for Microsoft." Mr Ballmer was referring to Mr Yang’s mo-ves to tie-up with Google, the advertising leader.

In response, Yahoo chairman Roy Bostock and CEO Yang seemed to contemptuously dismiss Microsoft’s withdrawal of its unsolicited acquisition bid, which Mr Yang called a "distraction" to his company’s pursuit of a new strategy to shore up internet advertising revenues.

In the three months since Microsoft’s proposal, Yah-oo has tried to grab other alternatives that would help keep Microsoft giant at bay. Whether any of these moves will work is to be seen, but Mr Yang is now left looking for a quick alternative that will help satisfy its shareholders about the need to fend off the Microsoft bid.