It is reported that Microsoft had the last round of consultation with Yahoo! last week. Because they still could not reach an agreement on price, Microsoft decided to give up acquiring Yahoo!. In a letter to Yahoo! CEO Jerry Yang, Microsoft CEO Steve Ballmer said that Microsoft was willing to offer $47.5 billion, equivalent to $33 per share, which was higher than the original price of $29.40.
However, Yahoo! insisted on increasing the price to $53 billion, equivalent to $37 per share. This price was almost twice Yahoo!'s stock price of $19.18. In response, Ballmer stated in the letter: "Obviously, such a price is unacceptable to Microsoft."
There is no doubt that Microsoft's move has surprised the entire industry. Because many analysts believed that whether by raising the offer or through a proxy fight, Microsoft would eventually successfully acquire Yahoo!.
But Ballmer claimed that launching a proxy fight at this time would be inappropriate. He stated in the letter: "Through negotiations, we feel that Yahoo! does not wish to be a takeover target for Microsoft."
Despite this, some analysts believe that Yahoo! will not disappear from Microsoft's sight. In the near future, if Yahoo! cannot quickly regain its strength, then later this year, Microsoft may very likely return and make a second bid.
Industry analysts believe that if Yahoo! cannot make a comeback, then Microsoft's second bid will be hard for Yahoo! to refuse. And currently, Microsoft still believes it has the ability to compete with Google in the online advertising market.