I never really understood why MSFT wanted to invest in a sinking business. Granted “Live Search” never really became part of our day-to-day vocabulary the way “Google It” did, but “Yahoo It” never really hit the spot either. The decision to merge with Yahoo! came about 5 years too late. Five years ago it would have made sense to compete against Google with Yahoo!’s support. But even then, the only audience to benefit from that competition would have been online advertisers. We were hoping for less expensive real estate and a greater return for ad clicks than Google currently offers. I’m convinced that MSFT can put the 48ish billion dollars into R&D that will deem a higher return than Yahoo! ever could. This is a good day for MSFT.

Microsoft Withdraws Yahoo Offer
After Attempt to Bridge Gap in Price

By KEVIN J. DELANEY, MATTHEW KARNITSCHNIG and ROBERT A. GUTH
May 4, 2008 6:02 p.m.

Microsoft Corp. said it abandoned its offer for Yahoo Inc., as the two companies failed to bridge a gap between them on price.

Microsoft Saturday released a letter from Chief Executive Steve Ballmer to Yahoo CEO Jerry Yang saying that Microsoft had said it was willing to raise its offer to $33 a share for Yahoo, but Yahoo demanded at least $4 per share more.

“Despite our best efforts, including raising our bid by roughly $5 billion, Yahoo has not moved toward accepting our offer,” Mr. Ballmer said in a Microsoft press release. “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,” he added.

Read more: Wall Street Journal Article