Microsoft Withdraws, Yahoo! Stock Goes Down

Over the weekend, Microsoft officially withdrew their unsolicited bid to acquired Yahoo. Yahoo’s CEO, Jerry Yang, refused to settle down for anything less than $37 per share. Microsoft made some last minute efforts on Friday by raising the bid to $33 per share or an extra 5 billion dollars, but that didn’t work out for Yahoo.

On Saturday, Yang and Yahoo’s co-founder, David Filo, had a face to face negotiation with Microsoft’s CEO, Steve Ballmer in Seattle. Yang told him in person that anything below $37 is unacceptable for Yahoo’s shareholders. The negotiation failed and Microsoft pulled away from the proposed acquisition shortly thereafter.

Yahoo’s stock took a huge nose dive of about 16% and it has come down to $23.90 per share today. Yang must think of a strategy, else he’ll feel the wrath of his fellow employees who are under stock-options. If it continues to drop further, we could see Microsoft knocking Yahoo’s doors again, but this time for a much lower cost. Perhaps, we’ll see Yahoo merging with AOL or Google?

Do you think Jerry Yang took the wrong decision? Tell us through comments.

[Via: AP]

This post was published by on May 5, 2008

About the Author: Thilak Rao works as a Social Media Expert. He is one of the first professional bloggers from India, and he loves to write, travel and click photos. Follow him on Twitter @thilak

  • http://www.seoresults.co.za SEO Man

    WOW! The Microhoo saga ends! Or do you think it is a strategic withdrawal for Microsoft, deliberately causing the share price to nosedive so they can get it for a better price later on? To be continued……

  • http://www.netage.co.za Marketing Man

    Jerry Yang is acting on behalf of its shareholders. It would be unfair to go below, what is fair and that is his decision. Microsoft definitely played a role in the share drop and Im sure acquired considerable shares at the lower rate.

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  • http://green-flamingo.com Nathaniel

    I heard about this over the weekend, and heard that Microsoft was just throwing that high $number$ out there and then Yahoo! would go for it but they would eventually pay lower. Yahoo! was smart though, and revealed that MS was not really willing to pay that much. Yahoo! also felt that MS was undervaluing them.

  • http://prosperitywriter.com/ Prosperity Writer

    i think its a great strategy for microsoft. they’ll be back when the yahoo stock price hits rock bottom

  • http://www.greatpriceshere.com Nicole Price

    This is just a tactical withdrawal. The story is far from over.

  • http://www.sizzledcore.com Haris

    I wonder what’s Microsoft’s next prey :) Facebook, MySpace or something else…

  • http://technodorm.com Fahad

    Lets see how this turns out in the end. As you pointed out, Microsoft will probably be making another bid after shares fall even more, and they might just end up grabbing yahoo for less then the proposed $33 per share offer…

  • http://www.discountwebdesign.co.uk Ralph

    Not selling to Microsoft is the biggest error Yahoo could have done. I already see Yahoo on it’s downfall.

  • http://prosperitywriter.com/ Prosperity Writer

    i think its a great strategy for microsoft. they'll be back when the yahoo stock price hits rock bottom