The on-again, off-again affair between Yahoo and Microsoft, rumored to be back on again last Friday was abruptly abandoned over the week-end.
According to reports Microsoft walked a away from the deal when Yahoo refused to settle for the additional $5billion Microsoft had agreed to add to its previous $42billion bid. However further speculation suggests that Microsoft may have balked at the idea of entering into an open marriage with internet giant and that it was Google’s deeper pockets that were really the dealbreaker.
Google has agreed to sell some search advertising for Yahoo. And since Google earns far more on every search than its rivals do, this will mean an immediate increase in Yahoo’s profits…Microsoft [said] the prospect of such a deal that could deprive Microsoft of being able to sell all Yahoo’s search ads made proceeding with a hostile takeover less attractive.
Meanwhile, Microsoft head Steven A. Ballmer is reportedly now under pressure to do something with that $46 billion check he had set aside for the shareholders. While options being bandied about include investments in the always attractive online social networking sites, perhaps he should consider going retro and purchase a newspaper.