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Microsoft walks away from Yahoo deal

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The ongoing Yahoo/Microsoft acquisition saga has ended, with last-minute negotiations coming to naught and Microsoft withdrawing its offer for the search and advertising site on Saturday. 

Weekend negotiations saw Microsoft raise its bid from $29.40 per share to $33.00 – but Yahoo refused to accept anything below $37.00 a share – at which point Microsoft CEO Steve Ballmer walked away.
The new offer was $5-billion more than the initial bid.
Ballmer wrote in a letter to Yahoo CEO Jerry Yang: "Clearly a deal is not to be."
Yang's response, on the Yahoo Web site, reads: "With the distraction of Microsoft's unsolicited proposal now behind us, we will be able to focus all of our energies on executing the most important transition in our history so that we can maximize our potential to the benefit of our shareholders, employees, partners and users."
Meanwhile, talks between Yahoo and News Corp's MySpace are also said to have cooled, although Yahoo is still looking at tie-ups with Google and AOL.
Yahoo's stock has risen in the last few weeks, from $19.00 to $28.67, but analysts believe it will retreat again now that the Microsoft deal is off the table. And a loss of value could signal a new offer from Microsoft.